1993 Legislative Session: 2nd Session, 35th Parliament HANSARD
The following electronic version is for informational purposes only.
The printed version remains the official version.
(Hansard)
TUESDAY, JULY 20, 1993
Afternoon Sitting
Volume 12, Number 12
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The House met at 2:05 p.m.
Hon. M. Sihota: Joining us in the gallery today from Metchosin are David and Jo Marshall, their daughter Rosalind Fuss, and their grandchildren Michael and David Fuss. I had the opportunity to meet these people at lunchtime. Rosalind, who is from Ontario, asked me whether or not the Legislature here in British Columbia is more civilized than is the case in Ontario. I assured her that it was, and I'm sure that all members will reinforce that later on this afternoon. Would all members please give them a warm welcome.
Hon. T. Perry: I'd like to acknowledge the presence in the precincts of Prof. Lam Quang Thiep, the director of the higher education department of the Republic of Vietnam, who has been visiting at Malaspina College, studying English and exploring links between our two countries; and also the presence of Mr. Bob Campbell and associates of MacDonald Dettwiler, who have been demonstrating the land data proposal for integrated GIS in B.C. I'd like to acknowledge, as well, the presence in the chamber of Mr. Win Stothert, chairman of the Stothert Group of engineers and one of the principals in the new B.C. Research Corp., and his delightful wife Polly, who has just moved up from Palm Springs in search of that clear Canadian liquid sunshine. They are with us today along with Jim Rhodes, a frequent visitor to the precincts. Would all the members please join me in making them welcome.
J. Weisgerber: I'd like to welcome a good friend from White Rock. Chip Barrett was the Socred candidate in Surrey-White Rock in the last election. Chip is joined today by his son Tim. Would you please join with me in making him welcome.
Hon. B. Barlee: On the east side of the House, in the visitors' gallery, is Her Excellency Lillie Chitauro, who is High Commissioner for Zimbabwe to Canada. She is accompanied by Mr. Wilbert Dumba, who is the commercial consul for Zimbabwe. They've come a long way. Would you extend them a warm welcome, please.
B. Copping: I'm very pleased to introduce a constituent, Belle Barbour, who is in the gallery today. She does a tremendous amount of work for the hon. Minister of Environment, Lands and Parks and also for myself. Accompanying her are Racine Barbour, Jennifer Barbour and Brianne Barbour. Would the House please make them welcome.
Hon. G. Clark: I'm delighted to introduce in the gallery a very thoughtful British Columbian, Mr. Vuksic. He is a constituent in Vancouver-Kensington, I believe. I ask all members to make him welcome today.
E. Barnes: I'd like to thank the hon. Leader of the Third Party for announcing the presence of Chip Barrett, the former Socred candidate. I fortunately got in the House just in time to catch his name. I'm sure that Chip will recall the days at UBC when I was his coach. He was a football player -- and a very good one, I must say.
However, I Will Say This: I didn't do a good enough job, because he didn't make the right decision -- but he's still a pretty good guy. I would like the House to join me in making him welcome as well.
D. Mitchell: I'm pleased to note that a former mayor of Squamish, British Columbia, Mr. Phil Turner, is in our gallery today. He's a constituent of mine as well. Would the members of the House please make him welcome here this afternoon.
Hon. D. Marzari: Would the House please welcome Mr. Michael Harding to the House today. He's actually here to witness the passing of the Cultural Foundation of British Columbia Act. He is the former executive director of the Jumpstart dance company and is presently involved with fundraising for the Burnaby Arts Centre.
B.C. RAIL LABOUR DISPUTE
D. Symons: My question is to the Minister of Transportation and Highways. The central region of our province depends on B.C. Rail as its lifeline, and that lifeline is now cut. Considering that the government has been aware for quite some time of the possibility of a strike, what contingency plans does this government have in place today to prevent undue economic hardships in that area?
Hon. A. Charbonneau: I am fully aware of the possible economic implications of the strike. I am puzzled that it has occurred, as it was my understanding that the issues were being resolved at the negotiating table. It is my understanding that the caboose issue stands in the way. However, B.C. Rail has proceeded through two and a half years of process and has won the right to implement.... I have indicated support for the corporation on this issue. I have urged that they get back to the table, and hope that shortly I will be able to report resolution of the issue.
D. Symons: I note that the hon. party there is also in the caboose.
My supplemental is to the Minister of Tourism. The Royal Hudson is a widely known tourist attraction. Sustaining and developing tourism depends upon certainty and dependability of service. The threat of a strike -- now a full-blown strike -- is seriously harming the tourism potential for the Royal Hudson train. What is this minister or her ministry doing to alleviate the negative long-term impact that this labour dispute will have on our world-renowned tourist attraction?
Hon. D. Marzari: This minister and ministry are paying close heed to the words of my colleague the
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Minister of Transportation and Highways. We are both looking forward to an early end to this strike.
D. Symons: A very short supplemental, hon. Speaker: is that it?
Hon. D. Marzari: That's all there is to say. When a legitimate strike is occurring and there is a labour disruption, you take a consistent stand; you stick with it and you go with it. It is true that the Royal Hudson is a very important part of the British Columbia menu of tourist attractions. However, there are many more, and British Columbia does not have a shortage of tourists this season.
PREMIER'S PROVINCIAL TOUR
J. Weisgerber: My question is for the Premier. Yesterday the Premier confirmed that he would campaign extensively for Audrey McLaughlin in the next election, at the taxpayers' expense. Doesn't the Premier understand that the reason he's in his political Death Valley is that British Columbia taxpayers are sick and tired of this government's abuse of their dollars? Can the Premier possibly justify campaigning on behalf of the federal NDP at the British Columbia taxpayers' expense?
Hon. M. Harcourt: I would have hoped that a politician with the experience of the Leader of the Third Party would realize that the fall is traditionally a time for the Premier, for ministers and for MLAs to get back to the grass roots to talk with British Columbians. That's what I said yesterday that I'm going to be doing.
J. Weisgerber: Indeed, yesterday on a local radio station the Premier said that he and British Columbians were tired of the "yack-yack" in the Legislature. Let me tell you, British Columbians don't want to hear your yack-yack around British Columbia on behalf of Audrey McLaughlin, particularly when they have to pay for it. Will the Premier immediately cancel this tour, or will he at least agree to impose a moratorium on propaganda coming out of his government until after the federal election?
[2:15]
Hon. M. Harcourt: I can say unequivocally that I have never used the words "yack-yack." I can also say unequivocally that my duty is to the people of British Columbia, and I'm going to be out among them listening, hearing their concerns and telling them about the great future this province has. We have created almost one-third of the new jobs in this country. We're on to the Asia-Pacific, which is the fastest-growing area in the world, and British Columbia is the front door to that. So while most of the people on the opposition side, whichever permutation or combination they're in these days, are going to be pursuing their own political opportunities in whichever political party they're going to be running for, we're going to be out taking care of the people's business.
Interjections.
The Speaker: Order, please. Final supplemental, hon. member.
J. Weisgerber: Well, at least one federal MP doesn't agree. Yesterday Nelson Riis begged the Premier not to campaign on his behalf. Will the Premier do us all a favour and stay home this fall to mind the business of the province of British Columbia, and leave the federal election to its own resources?
Hon. M. Harcourt: The reason Nelson Riis doesn't need help from anybody, including the hon. Leader of the Third Party, is that he won his riding by 10,000 votes in the last election. He is one of the best MPs in this country.
PROVINCIAL DEFICIT REDUCTION
F. Gingell: My question is also to the Premier. I appreciate that yesterday the Premier had a bad day when the Angus Reid poll showed he only had a 23 percent approval rating. But today is better: today the Premier knows that the Minister of Finance only has a 9 percent approval rating.
During the course of the '91 election, the Premier said: "We will not spend a penny that the people of British Columbia do not have." Eighty-three percent in this Decima poll say that they want to see this deficit reduced by cutting spending. When will the Premier explain to the Minister of Finance that this is the way it should be done? You have just stated that you are going to go out and listen to the concerns of British Columbians. Will you listen to the 83 percent, explain things to the Minister of Finance, and keep your promises?
Hon. M. Harcourt: This government has made it very clear through the budget that we intend to take a balanced approach to balancing the budget. We have reduced the mess -- the deficit that we inherited from the previous government that was supposed to be $3.3 million. According to the independent financial audit for this year, it is $1.5 billion -- down from the $2.4 billion that we inherited. But that deficit reduction is being done in a balanced way, so we can provide a decent education system for our children and our workers who need to gain new skills; so we can keep medicare intact and bring about the reforms to health care, by investing in B.C. 21; so this province can create even more jobs; so people have some hope and a sense of the future; and so even more people will move from the other parts of Canada to British Columbia.
F. Gingell: Will the Premier please start to recognize that government jobs do not create economic growth? The only way we are going to create a balanced budget in this province is by reducing government spending. Eighty-three percent of the people say that that's what they want. Will you please explain it to the Minister of Finance?
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Hon. M. Harcourt: This government appreciates that those 32,000 jobs were developed by the entrepreneurship of the private sector. But that entrepreneurship needs a partnership with government to make sure there are roads, bridges, transportation systems, decent schools and health care facilities to provide the quality of life that attracts the knowledge-based industries, the value-added industries and the Asia-Pacific industries that are going to drive this province's economy.
We are cutting waste. We cut $40 million of the bloated bureaucracy we inherited last year. We have cut cabinet members' salaries by 5 percent and we have, at my instructions, maintained the freeze on MLAs' salaries. And we will continue to cut more waste as we move to balance the budget.
PROTECTION OF PATIENT PRIVACY
L. Reid: My question is to the Minister of Health. Section 34 of the Medical and Health Care Services Act contains very specific wording to allow a duly elected inspector to enter a diagnostic facility to ensure that the act "is being complied with." Does the minister agree that the rigid requirements are intended to protect patient privacy from frivolous inspection?
Hon. E. Cull: The Medical and Health Care Services Act has the toughest provisions to protect individual privacy of any act that has been passed by this parliament.
L. Reid: I have a letter from the Medical Services Commission to a physician which requests that confidential patient information be mailed back to the commission. The letter quotes section 34 as authority, and says it is part of a cost study. But section 34 does not authorize random mail inquiries about confidential patient information, and it does not mention cost studies. Can the minister justify this flagrant misuse of a statute by her officials?
Hon. E. Cull: I will take that item on notice and get back to the member.
LABOUR DISPUTE AT CHILLIWACK CARE FACILITY
R. Chisholm: Eden intermediate care facility in Chilliwack is on strike, and the patients have not received even the basics of health care in the past two weeks. What is the minister doing to ensure that health inspections are being carried out in strike situations and that health care in the province is not deteriorating?
Hon. E. Cull: The essential services designations under the labour code ensure that there are adequate services provided in all health care facilities in the case of a strike. The continuing care division of my ministry does regular checks of all facilities in such circumstances. If the member would care to give me the information on that, I can tell him when the latest report was made.
R. Chisholm: The question is: what happens if it's not happening? The minister's health care policy is to move long-term care patients out of the hospitals and into community care facilities. The BCGEU is interfering with this government's ability to implement its health care policy. Is this what the public can expect from the government's new Closer to Home strategy?
Hon. E. Cull: What the public can expect from our new directions in health care is that patients in this province will receive health care in an appropriate place. Let me tell you that no patient or senior citizen who requires continuing long term care wants to live in an acute care hospital bed. That is inappropriate care. They want to be in those long-term care facilities. That's why we are creating over 500 new spaces every year to ensure that our seniors get the care that they deserve.
If there is any concern on the part of this facility that the levels of service provided under essential services are not adequate, they have recourse under the labour code to go before the LRB and get a revision. That is done time after time by employers if they have any concern with it.
The Speaker: Final supplemental, hon. member.
R. Chisholm: When Alzheimer's patients are found on the lawns or downtown, and when patients are not getting their medication or not getting bathed for two weeks, it's time for you to look at your system, hon. minister.
Will the Minister of Health instruct the Minister of Labour to intervene and restore quality of life to the seniors in this province -- and instruct the Labour Relations Board to declare health care an essential service?
Hon. E. Cull: I don't think the member was listening. I answered very clearly that the employer has the authority to have changes made to essential services if they believe there is a problem. My ministry has the responsibility through continuing care to ensure that standards are being met, and we're doing that.
GO B.C. GRANT TO KAMLOOPS INDIAN BAND
K. Jones: The guidelines for GO B.C. grant pay-outs clearly state that in the case of grants over $100,000, the pay-out is made in three instalments. The second pay-out is to be made after the project is certified, by an independent professional, to be half completed. In the case of the $1 million grant to the Kamloops band, could the Minister of Government Services tell us how the Minister of Highways, whose riding is in Kamloops, was able to have the second portion of the grant -- totalling $333,000 -- issued before the halfway mark?
Hon. L. Boone: I'm pleased to answer this question. It's not unusual to advance a portion of the payment if warranted, providing that proper approvals have been received. In this particular case, proper approval was received through cabinet. The Minister of
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Highways did not grant this, but merely delivered the cheque to the Indian band.
D. Mitchell: Hon. Speaker, I have given you notice of my intention to raise a question of privilege under standing order 26, practice recommendation No. 7. My question relates to unanswered questions on the order paper, requesting details of the government's use of contractors to conduct public opinion research and gather polling data. These questions have been on the order paper for more than four months. Surely that's more than enough time for the government to answer written questions. The standing orders of our House lay the groundwork for the information-seeking role of members of this assembly. I would refer members to standing order 47(1), which deals with written questions in particular.
When a government refuses to answer questions in a timely fashion, it makes a mockery of our rules and parliamentary traditions. Furthermore, the government's refusal to answer written questions on the notice paper impedes my ability as a member of the assembly to do the job that my constituents have sent me for.
As a result, I believe the government....
The Speaker: Order, please. Hon. member, I have hesitated to interject and I regret I am doing so. But I want to remind the hon. member that he is only permitted at this point to state briefly the matter of privilege and is not permitted to debate or enter into argument on it. If he would conclude his statement and forward the appropriate documentation to the Chair, the Chair will take the appropriate action.
D. Mitchell: As a result of what I said, I believe the government is now showing a gross contempt for our parliament and for all members of our House by its continuing disregard for the standing orders and established procedures of this assembly.
Some Hon. Members: Order. order!
D. Mitchell: I would refer very briefly to Sir Erskine May's Parliamentary Practice, which states....
The Speaker: Order, please, hon. member. The member having concluded his statement, I must now ask him to forward the motion he would intend to move if the Chair does find a prima facie case of privilege.
D. Mitchell: I will conclude my statement by referring to Sir Erskine May's Parliamentary Practice, which states very clearly that parliamentary privilege is a right of members of the House....
The Speaker: On a point of order, the hon. Minister of Labour.
Hon. M. Sihota: I certainly endeavour to be as patient as I can in allowing the hon. member to state his prima facie case. But there's a difference between stating a prima facie case and making a political statement in the House, which is out of order in this instance. There are other opportunities and occasions when the hon. member can do that.
Hon. Speaker, you've ruled the member out of order in his statement. I would urge you to make it clear to the hon. member that his statement is clearly out of order, and he is to forward his material so that it's done in keeping with the rules, so that at the appropriate time we on this side of the House can respond to the point he's raising.
The Speaker: Thank you for your point of order, hon. member.
Interjections.
The Speaker: Order, please. I repeat for the final time the request to the hon. member for West Vancouver-Garibaldi to now forward the documentation. The Chair has now got the gist of the point of privilege raised and will take it under advisement, hon. member.
[2:30]
Interjections.
The Speaker: Order, please, hon. members. I would ask the member to take his seat at this time. I do appreciate that the hon. member would like to finalize his statement, but the rules of debate are clear for a point of privilege: only the statement of privilege may be given at this time; debate cannot be entered into. I think that the Chair has given considerable leeway in this instance, and I hope that the member will now forward the appropriate motion to the Chair. The Chair will take it under advisement and get back to the House as soon as possible. I would ask the member to now do that.
D. Mitchell: Hon. Speaker, if the Chair agrees, I am prepared to move the necessary motion, which I will now tender to you along with my statement -- half of which was delivered today.
The Speaker: Thank you, hon. member. The Chair will take it under advisement and come back to the House as soon as possible.
Hon. A. Petter tabled the 1992-93 audited financial statement of the Provincial Capital Commission.
Hon. M. Sihota: Hon. Speaker, I call committee on Bill 75.
LIBRARY FOUNDATION OF BRITISH COLUMBIA ACT
(continued)
The House in committee on Bill 75; E. Barnes in the chair.
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On section 2 (continued).
A. Cowie: I would like some clarification under 2(6). I note that the members are not paid compensation; there is no remuneration. Does this also mean that the chair will not have remuneration? I take it that this is going to be quite an important and time-consuming job, which would not have any pay.
Hon. R. Blencoe: There is no pay for any members at all, including the chair.
A. Cowie: I also understand, from discussions we had this morning, that the 11 members will come from a wide area of the province, so I take it that at times it will be hard for all members to get to meetings. Has the minister established a quorum?
Hon. R. Blencoe: The usual rules of order are 50 percent plus one, and that would be the practice.
H. De Jong: During my municipal years I served on the Fraser Valley Regional Library Board for many years, as a member as well as chairman. From time to time we had meetings with other library boards and the association of library boards. There are a number of different kinds of libraries throughout the province; some are of a regional nature and some are of a specific municipal nature.
Why would the government want to establish a foundation totally outside of what is already there as an association of library boards? Why are they being ignored in this vital process of establishing a foundation? On many occasions during the years that I served, there were some discrepancies between libraries, whether they were of a city or regional nature. At the same time, there was a common interest expressed by all those boards. The real question was always: why do we not have more reference material? It was the same question with the city libraries, but perhaps even stronger with the regional libraries. From what I understand, the idea of the foundation is that eventually -- with the moneys that are put into the foundation and the interest received from that -- they would be used for a specific purpose within the library system.
First of all, I don't see anywhere in this bill what these moneys would be specifically used for. I know that I am going a little bit beyond section 2, but at the same time, why is this foundation board established outside of the parameters of that library association that is already there? Why do they not have an opportunity to make special recommendations as to who they would like to see? The government would not necessarily have to accept their recommendations, but why not give them a chance for some input?
Hon. R. Blencoe: I will answer the member's questions very quickly, which I hope will satisfy him. As the member knows, this legislation establishes the Library Foundation as an agency of the Crown. It will have the ability to provide 100 percent tax deductibility for donations to it, which is similar to other foundations established under your former government. It was also a recommendation of a 1988 task force under your government that this be done.
The purposes and powers of the foundation are in section 5, in terms of what it is supposed to achieve. It has distinct purposes, and basically is there to foster growth and help facilitate library enhancement and, obviously, to collect funds on behalf of libraries in British Columbia.
H. De Jong: I know that section 5 gives a very broad description. The moneys could be used for anything that's happening within the libraries. I don't see people making a donation for the specific purpose that it be used for operational expenditures within the library on a year-to-year basis. I believe firmly that the moneys derived through established foundation funds should never be used for operations, because those operations are there already and are being looked after. This bill needs to be more specific so that we can have some more confidence in the establishment of a separate corporation -- if you can call it that. If I understand some of the following sections, this corporation also has the benefit of borrowing money. I question whether what is being proposed in this bill and the selection of a separate board are even in the minds of the B.C. Library Association, and whether they would want to have it that way.
Hon. R. Blencoe: I'm surprised at the kind of discussion that's coming from the Social Credit caucus. Everybody's in support of this piece of legislation. They want to get on with it. They want to be able to collect money to facilitate the growth of libraries. In section 5 the purposes and powers are laid out. We fully expect efficient operations. We're going to have a board that can adapt to library requests. We're working with the B.C. Library Association and the various people who are given the responsibility of managing our libraries. It is a positive initiative to ensure that we can find extra funds for libraries in British Columbia, so I am at a loss to see what the difficulty is. Everybody is endorsing this. It came out of your task force. It has been repaired in response to requests from the library community and to the pressing needs of the Vancouver Public Library. I don't know how much more I can say about it, but you can continue to speak if you so desire.
H. De Jong: I'm certainly not going to belabour this point beyond what I feel is correct. But I still think the minister has evaded the question as to why the B.C. Library Association has no input in the selection. Furthermore, I believe that most communities have a foundation within their boundaries -- I know that they have one in the Abbotsford-Matsqui area -- that makes donations to all kinds of public facilities in our community, not libraries specifically. That's something different again. At the present time there is an avenue in most communities to set aside funds for the advancement of library services, or for the special books that are so badly needed within the library system. I think I've made my point. I do not believe that the government is on the right track in establishing a
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foundation basically outside of the B.C. Library Association.
C. Serwa: I listened to the minister when he said that everybody is in support of this bill. It's been my finding that everybody, somebody, anybody and nobody are often used, and they have very similar connotations. I think he is hiding behind a screen when the minister says something like that.
[2:45]
The concern we have is with the integrity of the foundation that is established. I appreciate the interest that the minister has put forward with respect to funds being 100 percent tax-exempt when they're donated, and the necessity for the provincial government to make the appointments. I'm not going to argue or dispute anything that the minister has said. But I will argue that a truly representative board, which has the confidence of the system throughout the province and of the investors who would put considerable sums into this foundation either by bequest or by donation, has to be concerned with integrity and the true representation of the best interests of the public. While the final appointment has to be made by the government or perhaps by the minister, the reality of the source of those individuals who will stand for that appointment should be put forward through the various regional library districts throughout the province, for example, so that we get individuals who truly have a long background in it.
We're cynical on this side of the House, because we see what has happened with legislation that has flowed through this Legislature. We've seen the political partisanship in the various appointments by this government. We believe that this is a good initiative, but if the minister is concerned with integrity, there has to be a better mechanism than the government itself, through the czar of patronage appointments, appointing individuals to this very important board. If we don't do anything better than that, this whole concept of the foundation isn't going to fly simply on the fact that 100 percent of the donations are tax-exempt. In most cases they will be bequests of large sums of money, and obviously the individual is not concerned about the tax-saving implications of it. What they are vitally concerned about is how that money will be utilized to enhance the library system. We are going into a potentially tremendously expensive cost to the library system, because I think the libraries of today and tomorrow are being changed quite dramatically through electronics and computer systems accessing libraries all over the world for resource materials.
This is a very important initiative, but it seems to me that a better, more responsible method of selecting the members of this board is quite in order. The minister has to seriously consider some sort of more credible process. Otherwise, this initiative will fail.
Hon. R. Blencoe: We can continue to debate this issue, but I think it's somewhat unfair of the member to prejudge the appointments and the integrity, credibility or honesty of the future composition of this board. I should remind the member that we have to work with -- the Social Credit caucus laughed when I said this -- the federal government. They have certain rules and requirements. One hundred percent donations are difficult to get, and we have achieved that with this legislation, but they have certain requests. One of them is that this be an agent of the Crown as in section 3. They want to ensure that if that happens, it will be an agent of the Crown.
To answer the member for Abbotsford about directing, they were quite specific that people could not direct their donations to a specific library. It had to be to libraries in a general sense. Again, the federal government insisted on that.
We have gone through a lot of hoops to establish this for libraries in the province of British Columbia. As much as I can provide some comfort to the member in terms of my integrity, I shall do my utmost to ensure that the board reflects the problems of British Columbia and that we bring people to this board who have an interest in libraries and who will serve the citizens of this province in an honourable, honest way and with integrity. That's certainly what I will try to achieve in bringing forward names for the composition of this board.
L. Fox: Earlier the minister was surprised that we would be opposing the establishment of this foundation. Nothing could be further from the truth. In fact, we are extremely concerned, given the powers in further sections that this foundation will have, and that's why I put forth an amendment earlier on the structure of this foundation. Later, by the way, the bill refers to it more as a corporation than as a foundation. It's extremely important that this particular foundation be structured in a non-political way. If it does not represent a cross-section of B.C., it will not have the confidence of those people it needs to make donations -- and therefore help the foundation meet its goals and objectives of furthering our library services in British Columbia. It's from that angle that we bring forth these concerns, because we want the foundation to be successful. We do not want it to be a political body, which would react to the government's whim rather than to the needs of the libraries. It's from that perspective that we bring forth this argument.
C. Serwa: I have just a couple of questions on this section. The minister indicated that the foundation must be an agent of the Crown. I accept that. But for my information, what type of autonomy will the foundation have? I ask this with respect to section 2(5)(a), which says that the board may "determine its own procedure." I suppose the question is inspired.... If they are an agent of the Crown, then the latitude of autonomy is fairly important. I am familiar to a degree with foundations. If they determine their own procedure.... The donors, for example, will contribute a sum and that will remain in a perpetual fund, which will be invested. The interest thereby accrued, less the cost of the overhead of the operation, then may be distributed for whatever. I can only presume from this that the foundation can make a determination whether funds would be used for operating expenses or
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addressing fixed and variable overheads of library operations in the province, or they can make a decision, for example, that funds may be specifically used for the acquisition of new books, computers or materials for library systems. They may consider that funds from this may simply be an injection for acquiring capital and physical assets for libraries. I ask the question about autonomy to get some clarification on the latitude of the foundation determining "its own procedure."
Hon. R. Blencoe: I think it goes back to some concerns of the opposition that this foundation must not be perceived just as a direct arm of the provincial government. They must have some autonomy to set direction if they are to represent views or look at different needs of the libraries in the province. Consequently, they can determine their own procedures, conduct their own meetings and elect a person to be acting chair in the absence of the chair.
Section 6, which we have yet to come to, also does this, given that it obviously has to be an agent of the Crown. We want to make sure that, if necessary, the bylaws of the corporation established by the board are finally approved by the Lieutenant-Governor-in-Council. There's an interesting sort of process. Yes, there is some autonomy, but agents of the Crown will want to ensure that bylaws meet certain criteria or are acceptable. That's normal procedure, hon. member. You always did that when you were in government, and I think that's straightforward.
There was also a question about the title "corporations." This is also in the University Foundations Act that your government established. It's traditional, standard legal language in these affairs; that word and that language is used in other foundations that your government established, hon. member.
C. Serwa: I can appreciate section 6 when we get to it; we will certainly be looking at and discussing that, to elaborate on and clarify section 6. But on the phrase "determine its own procedure," my questions were: at what point and how will the government intervene in the foundation's direction? The minister alluded to approval of bylaws being discussed later on under section 6. But latitude of bylaws allows a fairly wide range of activities. Right now, this "determine its own procedure" seems to be an expansive term. The foundation itself may determine the distribution of funds -- as I say, whether they are to address fixed and variable overheads of library operations, or capital infusions. There are a variety of options that the foundation can address as the resources continue to build up. My question is: does the foundation have control over this? If not, what is the connection with the Crown on sourcing the direction? If the foundation was only to acquire the funds from donors, and then the funds were turned over to Municipal Affairs, which oversees the library systems, then perhaps I would have less concern. In that case we can always attend to it in estimates. But in this particular case I don't know where the accountability or the latitude is in this foundation. I think that before we go beyond this section, we have to find out what "determine its own procedure" really stands for.
Hon. R. Blencoe: Staff have pointed out a good point: if you read section 4 of the University Foundations Act, "Purposes and powers" -- I am sure that section 4 was done under the member's government -- then you go through this section 5, "Purposes and powers," it is identical language, hon. member. So we have obviously tried to use tried and true methods, and those foundations have worked well. In terms of bylaw control, again, it is the same as in the University Foundations Act.
I should also say that in terms of distribution of funds and property, we are getting ahead of ourselves; it is section 11. But the provincial government would not need.... There is no requirement for the federal government to interfere or step in, unless they go ahead or beyond the bounds of section 11 as it is laid out in terms of distribution. We may want to discuss that when we get to that section.
C. Serwa: What I would like to do.... I am prepared to leave section 2, because it seems to be my best opportunity to look at the total picture. Before I leave that section, I would like to see some potential for reasonable latitude as we discuss subsequent sections, because they will relate to this section to a degree. I think I have the latitude of the minister, and hopefully of the Chair in that situation, because it is an important issue.
[3:00]
The board determining its own procedure and its own course of action is something that leaves me with a substantial amount of uncertainty. As we address it in the sections that the minister referred to, which follow, we will try to develop a clearer picture on this. With that reasonable assurance of some latitude, I think I will leave section 2.
Sections 2 to 4 inclusive approved.
On section 5.
L. Fox: I think this is where we get into a lot of the nitty-gritty of the purposes of this foundation. I notice that in the first sentence of 5(1), we now refer to the foundation as a corporation instead of as a foundation. Then when we look down to section 7, we see that this new corporation has borrowing powers. I wonder why we are referring to this as a corporation instead of a foundation, and why that shift was necessary.
Hon. R. Blencoe: I have already answered that question, and I seek your guidance, hon. Chair, on this issue. I tend to be repeating. It is technical legal language that is required. It was required in the legislation and also, to answer that question, it is normal standard procedure. In terms of borrowing -- and we are not even there yet -- if you look at the university foundations, it's the same thing.
[ Page 8950 ]
C. Serwa: Foundations are normally registered as non-profit societies rather than as corporations, and I have listened to the minister with his response. Whether it's the Vancouver Foundation or the Central Okanagan Foundation in Kelowna, virtually all the foundations are registered as non-profit societies and can conduct business and their affairs under that. I don't understand why, all of a sudden, we have to register this as a corporation.
Hon. R. Blencoe: The hon. member is like me, asking the same kinds of questions. An agent of the Crown is significantly different than a non-profit society; it's a different model with different tax rules, and those are the requirements of being an agent of the Crown, I believe.
W. Hurd: I have a brief question under section 5(2), which states: "The corporation has the powers and capacity of a natural person of full capacity and may enter into agreements in its own name." Can the minister advise us whether those agreements would involve the incurring of debt on behalf of the corporation? Would they be able to enter into financial arrangements which might create indebtedness for the foundation or corporation?
Hon. R. Blencoe: We are again on section 7. I hope the hon. member will note that a lot of these questions have been asked in advance, but I'm trying to be as fair as I can to the opposition. In terms of borrowing money, this is an issue that has come up before with the former government's establishment of foundations. The reason this is there is that it is required to allow the foundation to plan its expenditures on the basis of money committed but not yet received. For example, as in other foundations, this foundation may have a commitment from an estate payable over a number of years, but it has a project that requires funding immediately. This will allow the foundation to participate in a timely manner in the project, as other foundations currently do. It has worked and been tested, and that is why it's there.
W. Hurd: Can the minister assure the committee that by virtue of the change from foundation to corporation the relationship to Revenue Canada in terms of issuing tax credits is fundamentally the same?
Hon. R. Blencoe: Absolutely. As a matter of fact, the term "agent of the Crown" is required. They stipulated that, long and hard.
C. Serwa: Section 5(c) says: "to receive, manage and invest funds and property of every nature and kind from any source for the establishment, operation and maintenance of the corporation and to further the purposes of the corporation." I would like to spend some time on this particular section because I'm concerned with the lack of any limitation on the type of investment that the corporation can make. It appears to me that in normal foundations which are non-profit societies, and the Vancouver Foundation is an example, they are restricted by certain acts as to the types of investments in which they can invest the money that has been put in trust for this specific purpose.
In this particular situation in subsection (c), there appears to be no restriction whatsoever. Typically, when a foundation is structured there are limitations. These funds are provided by donors with the implicit trust that they will be retained in perpetuity; therefore they must be invested wisely to provide an adequate return, but in a conservative fashion to ensure that the money will not be lost through a poor type of investment. Perhaps the minister will elaborate on that.
Hon. R. Blencoe: I guess the opposition may be more familiar with this, in terms of where we're taking the wording from. Section 5(c), hon. member, is lifted right out of your government's "Purposes and powers," section 4 under the University Foundations Act, word for word. It worked well, and we just went with what seemed to be working, hon. member.
C. Serwa: When you change the horses pulling the wagon, sometimes you get different results from the same wagon. Sometimes it goes faster and slower, and sometimes it doesn't go at all. So I derive very little comfort from the minister's statements.
Whether it worked or worked well or didn't work is a considerable question. Here we're asking the public, through bequests or long-term donations to the foundation, to put in money, and we have no design parameters on the type of investments that can be made. I don't know that there's a great deal of confidence and security in that.
People like to leave a legacy. One of the key attractions to this is leaving a perpetual legacy so that the dollars they leave can continue to work to better the society they grew up in and perhaps provide a better future and opportunity for those who are coming along. If the comfort from the type of investment is not there, then I again question the validity of subscribing.
Again I bring this point up, because whether it's 50 percent, as with the Vancouver Foundation, or 100 percent, it becomes primarily academic in the case of a bequest. Most of the monetary resources that have come to the Vancouver Foundation have come through the bequest path. So, without any limitations, there's considerable concern there.
Obviously the provincial government treasury branch carries on large investments, with some parameters, I guess; sometimes they don't work out. The Vancouver Foundation could manage these funds effectively, for example. They have a splendid track record, and in fact could manage the funds and take away the responsibility from this particular foundation. It's not an easy task to look after the effective management of funds.
There are a variety of options here, all in the interest of ensuring security of the donation. I know that the hon. minister is very concerned about the credibility and integrity of this proposed foundation. So perhaps he can give me the necessary comfort.
[ Page 8951 ]
Hon. R. Blencoe: I thought I was going to be satisfied with the track record, on this issue, of your government. However, I will add that section 6, which we're to get to, does give you the comfort. We anticipated that there might be some provincial interest in terms of borrowing and investments, and if we so deemed fit, through bylaws under section 6, we could limit or control their borrowing and investment if we found it to be a particular problem. But we don't anticipate any problem, hon. member.
C. Serwa: I perceive -- and I think the public would perceive -- a problem in this particular area. Would it not be cost-effective, perhaps, to have an organization like the Vancouver Foundation, for example, manage the investment of the funds along with their other investments? Again, I say that they have a splendid track record and a good return on the invested income with very prudent, shrewd investment advice. They have been very conservative, yet they have greatly benefited the province and have won wide-spread support. Several years ago someone from the Kelowna area, as a matter of fact, left $1 million to the Vancouver Foundation. That is fairly great recognition of the quality of work they pursue and also their commitment to continuity.
Hon. R. Blencoe: I'll just re-emphasize, hon. member, that this is basically the same as what the former government did in terms of other foundations. I think it's interesting that this member is trying to find something here that could be a problem. Hon. member, this is tried and true. It's clear; the language is no different from anywhere else. The Crown does have protection in terms of bylaws. Hon. member, I should also remind you that the federal government has insisted that it be an agent of the Crown.
But in terms of advice from other foundations or linkups, section 10 might very well allow for investment counsel to be brought in. That could be done. Another foundation like the Vancouver Foundation could be the counsel that is sought. There are all sorts of opportunities for creativity, and I think the hon. member knows that. I'll leave it at that.
C. Serwa: Thank you very much, hon. minister, for that opening. Hon. Chair, I have continued concerns, but obviously the minister has given a great deal of thought to that. Section 5(c) says "invest funds." Can the minister give me some idea of what he perceives to be the cost of this foundation as a percentage of income.
Hon. R. Blencoe: I don't have the exact amount. It's somewhat of a hypothetical question, hon. member. We expect minimal costs. There is no remuneration or anything else to deal with this foundation. There is structuring that is very similar to other foundations which worked exceedingly well in that area.
C. Serwa: Again, this is really important, because we're looking at the confidence and the integrity of the foundation. We have a proposal before us with absolutely no projections of the overhead cost as a percentage of income. That's why I suggested that what should have occurred is an assessment of other areas, such as the Vancouver Foundation, so that we would get that answer, because that's going to be a very important answer. I note that remuneration to directors is non-existent. Nevertheless, there can be a very substantial cost.
As a matter of fact, I remember reading that the most expensive president of the United States was the individual who worked for a dollar a year; I think he took it out in expenses, and he took it out very well to have earned that reputation.
So the concern is credibility. When we look at it, at the outset it seems to certainly be attractive, but it seems to me that a great deal more homework should have been done so that the minister would have been more forthcoming with the answers. Is it going to cost 10 percent of the income? Five percent? Minimal is sort of an ambiguous term. Minimal to whom?
Hon. R. Blencoe: Hon. member, this foundation could be as simple as 11 members and a bank account, which would maybe cost a few expenses for people getting to the meeting. If we have substantial contributions, obviously some of the operating costs may increase, but it depends on the level of contributions. I go back to what we've done with other foundations. We have all the flexibility and the power here to ensure that as an agent of the Crown, the government has a window in. We will have a chair who we will work with, and we have various procedures we can approve. I can assure you that this will be a well-run organization, as other foundations have been, with similar language and powers to those that you established when you were in government.
[3:15]
C. Serwa: Thank you very much for your patience. I appreciate that. I still continue to say that this is very important, and I'm not really comforted by talks of past history. There will be substantial costs -- legal, accounting, audit, staff and facility costs -- as well as the expenses incurred for the directors' travels. They are not small costs; they're very substantial over the course of a year, and you can't ignore them. The trust responsibility is very grave, indeed, and the minister acknowledges and appreciates that fully. But it is not as if it's a simple type of operation. It's a very responsible type of foundation that the minister is proposing, and they will have substantial costs. Whether those are wages to the directors is not a major factor here. The reality is that there will be travel and all the other costs I have addressed, which in the course of a year are very substantial. It's apparent that the minister hasn't even bothered to make some sort of assessment to understand what will transpire. A close hand must be kept on foundations as well. Just because you have large capital sums in the bank and are bringing investment income in tends to promote -- if you have the wrong people involved -- a laxness in the system, and we must be faced with substantial overhead costs. When the minister says minimal costs, it doesn't really give anyone any sort of an idea. The track record of past
[ Page 8952 ]
administrations with respect to foundations is something I'm really not aware of. Perhaps the minister would care to divulge some of the good statistics.
Sections 5 and 6 approved.
On section 7.
L. Fox: The minister referred to section 7 earlier. He talked about the fact that there may be contributions made over a series of years and that the board may wish to call upon those prior to the receipt of the total donation. That alerted some concern in my mind, because my idea of a foundation is that you collect these donations, and they are put into trust fund. The expenditures reflect spending only the interest paid on the trust, not paying out the principal of the donation. It seems to me that borrowing on money that has not yet been paid into the trust but is committed over a series of years would actually be drawing on the principal of the amount that would be paid in. Is that the intent of this section?
Hon. R. Blencoe: As I read this borrowing section, it's identical to the University Foundations Act I referred to, which your government brought in. My understanding is what I said to you earlier -- that the foundation, like the university foundations, is given an expectation of a commitment from an estate, but it doesn't come all at once; it comes over a period of years. They know it's there legally, and they therefore can plan according to that. That's my understanding of what this intent is. It's the same as we've got in the foundations' borrowing, in section 6, under the University Foundations Act.
L. Fox: The minister keeps referring to what he's pirated from other legislation. The fact of the matter is that in any bill, or any piece of legislation, it all flows together. Other pieces of legislation may control the borrowing aspect differently than this legislation does -- if so, I'm not aware of them. I guess my concern is that if I, in drawing up my will, decided that I was going to leave a lump sum of money to a trust to be made payable out of the estate for some practical reasons, probably over a period of years, then I would be concerned about the opportunity for the trust, or in this case the corporation, to borrow on the capital amount. If it did, this would lessen the opportunity for my total donation to sit in perpetuity within that trust and to contribute to the foundation in an interest-bearing way. This particular section may allow that board -- perhaps by bylaw, although it doesn't state that -- to reuse the principal amount, and that is a concern.
Hon. R. Blencoe: We fully anticipate that they will have borrowing bylaws. We will therefore allow the various financial people in government to take a look at those borrowing bylaws to see if they fit and ensure that they're not problematic, as we do with university foundations. Treasury Board or the Ministry of Finance can take a look at those kinds of borrowings.
In terms of your bequest issue, I think you're suggesting that you are prepared to put a bequest in, but only the interest can be utilized by the foundation. That could be stipulated. If the bequest were interest only, the foundation would only borrow the present value of the interest.
C. Serwa: I just have to challenge the minister's statement, because I don't understand a foundation where you will actually take the principal and spend it. The minister clearly said that you would spend principal. I just want to clarify that, because my understanding of a foundation is that the moneys invested are for perpetuity, and only the interest from those funds may be spent.
Hon. R. Blencoe: I think we're getting into semantics. If it's principal over time, we can deal with it. If it's interest over time, and that's the nature of the bequest, that can be dealt with in terms of the foundation. It would only be able to borrow the present value of the interest or the principal over time.
C. Serwa: I think the minister is just going to have to explain that a bit more clearly to me. If the bequest is made and the money is put in the foundation, whether it's specified or not, that money is put in trust in the foundation for perpetuity. That's how it works in a standard foundation. Only the interest or the earnings of that principal amount may be utilized for the purposes of the foundation. Is that correct?
Hon. R. Blencoe: Yes.
C. Serwa: Thank you very much. That was an important point to clarify, because as an agent of the Crown I wanted to explore if they had some latitude that normal foundations did not have.
The borrowing authority in section 7 that we're discussing at the present time is a very unusual section. Certainly when you relate it to foundations.... My experience has been with societies or community-type foundations, and this capacity is not within that. It makes me wonder what the purpose or agenda of the foundation is if it is going to have to borrow or sell debentures. Is the purpose of the foundation, as expressly implied by the minister, an opportunity to source more funds to enhance the library system in British Columbia? Is it partly the purpose of the foundation to do that? Is the real purpose to reduce the expenditures of the Ministry of Municipal Affairs, Recreation, and Housing? That's what it appears when you get into borrowing, debentures and imposing a potential for indebtedness on a foundation.
Hon. R. Blencoe: No, hon. member; you are incorrect in terms of your last statement. Again, I refer to the University Foundations Act, section 6; the language is the same as we're doing here. This is not the same kind of foundation that you're familiar with. It is an agent of the Crown, and there are certain stipulations and differences. Again, hon. member, there is nothing different from what your government did.
[ Page 8953 ]
A. Cowie: I'd like to enter this filibuster that's going on with a clarification. I heard the minister say that if I were to give the foundation $1 million, the foundation could not spend it. I think it depends on how I specify the money is to be put in. Surely the foundation could spend the million dollars; that is, it could spend the principal, not just the interest.
Hon. R. Blencoe: Hon. member, you could either give the million dollars or you could give the endowment of the interest for $1 million. It's your choice.
A. Cowie: Thank you for the clarification, because that wasn't clear in the answer to the previous question.
L. Fox: As I understand it, the trust is not going to be a trust in all cases; it's going to be a flow-through in some, and a trust in others. I would suggest, however, that if anybody is donating $1 million that they want to see disbursed right away, they are probably going to look at their own community or own area for a capital structure they can hang a name on. Therefore there is some recognition for their contribution.
Let me get back to the part of this section that both the member for Okanagan West and myself are talking about: the borrowing authority of this particular corporation or foundation. If I, as an individual, have bequeathed X number of dollars to the foundation -- and, because of the situation within my estate it may take some time for that to become liquid to make the payment or to clear up the holdings, property rights or whatever the case may be in order to transfer it -- if it's a normal type of contribution to a trust, then the borrowing authority would not come to be. As I understand the minister's words in this clause, all you would be able to borrow on is the interest that the donation would have created, and because you don't have it at this point, you don't have any interest on which to borrow.
Interjection.
L. Fox: I know, but it's an important issue.
If in fact the trust itself has made an investment from which it will receive remuneration over a period of months in order to meet its year's expenditures, then I understand the need to borrow in order to meet its expenditures in a one-time year, because its investments may mature at a different stage of the operating year. That's one issue. I could understand if that applied in that case.
[3:30]
But the other issue -- of borrowing on trusts not yet received by the foundation -- is a concern I have. The minister suggests to me which priority is the correct one: the priority to borrow on investments that the board may make but that do not mature at the appropriate time to meet its expenditures or needs for that year. Is that the main purpose of this clause?
Hon. R. Blencoe: The board may wish to accommodate your statement and interpretation. But they also may wish to take up the anticipated or phased interest or money that they can fully expect from an estate, say, which won't be paid out all at once or will be paid out over time.
Section 7 approved.
On section 8.
C. Serwa: I was surprised by the comments just a few minutes ago by the member for Vancouver-Quilchena, although I shouldn't have been; I've noted how he often votes with the government. But when he considers this a filibuster he's truly out in left field.
In any event, when we look at section 8 I'm concerned again with the foundation simply duplicating other opportunities for investment. I can see the redundancy in the demand on individuals who are capable in the investment field. I'm concerned about the increase in risk when you have a foundation.
It appears to me that the only qualification is: "The board may make investments that a prudent person would make." I look around in this Legislature and, while they're all hon. members, I don't see too many prudent hon. members on the government side of the House, and I'm not certain how many prudent friends these hon. members have. I have a great deal of concern when the investment powers are limited only by that prequalification. It doesn't seem to inspire confidence or security.
I hope that the minister doesn't rise and respond to me: "That's the same vehicle the former administration utilized, and it's the same wording." I gave one analogy, and I suppose we can use a car: if you use the identical car and put different drivers in it you will get different results. I would like to hear what the minister has to say. I presume he's given some thought to this important bill.
Hon. R. Blencoe: I won't participate in the political rhetoric coming from the other side. Suffice it to say we will appoint people with prudence and integrity who can manage accounts. Hon. member, as you well know, we're a government that at great expense has managed to eliminate considerable deficit and mess that your government left. I can assure you that we can find prudent people, just as you could.
C. Serwa: I won't get into a debate on that, because it's pointless. I think the public knows better than to listen to the minister's remarks.
The minister has alluded to a number of foundations that the provincial government has, and they're all agents of the Crown. Would it not be reasonable to have one central type of investment authority that would handle the investments, rather than trying to find a diverse, new group of people who may have a great deal of knowledge and interest in libraries but very little in financial matters? It seems to me that the risk factor here is inordinately high.
[ Page 8954 ]
Hon. R. Blencoe: Again, I will do what the member said, the same as section 7(1) in the University Act. I will take his comments under advisement.
Sections 8 and 9 approved.
On section 10.
C. Serwa: In section 10, again acknowledging that there will be considerable expense with respect to generating income from donated funds: "The corporation may employ the services of investment counsel and fix their remuneration." Again, why would the minister bring in this section 10(1) when there are other vehicles which could be utilized more efficiently, reducing the risk and providing the necessary security and return to the foundation?
Hon. R. Blencoe: The member is talking about a high cost that doesn't necessarily exist. But I also remind the member that this is identical to section 9 of the University Foundations Act brought in under your government.
C. Serwa: It is amazing to see the reliance on the wording of previous sections written by the former administration. I suppose we should take it as evidence of a job well done. Nevertheless, the reality is that if we are looking at a proliferation of government agents-type of foundation -- we will shortly be looking at another one that the Minister of Tourism will be bringing forward -- it seems only prudent and makes a great deal of common sense to seek some form of investment that would incorporate all of these funds. You will have a lower cost for investing the funds, a more efficient management of a larger fund and, hence a more attractive return. So as well as the reduction of risk, you get a more handsome return and a very cost-effective approach. Surely the minister can clearly see that as we increase the number of these, and we have, it would be wise and prudent to look at some consolidation with respect to the financial management of investments -- sort of a joint-stewardship program of Crown agents perhaps.
Hon. R. Blencoe: There is nothing to preclude that. That is future policy. Again, I will take your comments as they are noted.
Sections 10 to 17 inclusive approved.
Title approved.
Hon. R. Blencoe: Thank you to my colleagues for their comments. I move the committee rise and report the bill complete without amendment.
Motion approved.
The House resumed; the Speaker in the chair.
Bill 75, Library Foundation of British Columbia Act, reported complete without amendment, read a third time and passed.
Hon. R. Blencoe: I call second reading of Bill 76.
CULTURAL FOUNDATION OF BRITISH COLUMBIA ACT
Hon. D. Marzari: I'm pleased to begin second reading debate on Bill 76. The purpose of this legislation is to establish a foundation which will encourage private sector donations to the cultural sector by increasing the tax deductibility of charitable donations. In creating this foundation, as with the Library Foundation, we will help to ensure financial health -- but in this case, of culture -- through steady long-term investment.
This legislation is one component in a series of initiatives designed to meet a strong government commitment to culture. These initiatives include securing improved federal funding for culture, improving the economic and employment status of artists, and increasing the access for artists to cultural programs.
We've seen these initiatives carried out through ongoing negotiations with the federal government for increased funding through the establishment of the status of the artists' committee and through the development of new cultural programs. This legislation in particular speaks to our commitment to stabilize the financial future of the cultural sector. By bringing forward this legislation, the government acknowledges the need to diversify the economic base for culture by creating new mechanisms for investment.
This does not mean that the government has forsaken its own responsibility to the cultural sector. In a year where cultural funding has been slashed in other provinces and by the federal government, the dollars this government has provided to culture have remained constant. Against all odds, grants to artists and arts organizations have been maintained.
The foundation builds on our commitment to culture, and it sends out a strong message that culture is a worthwhile investment, which from both an intrinsic and economic viewpoint is very important to all of us. Every year culture creates more than $17 billion in economy activity in this country and returns about $650 million directly to the federal treasury through wage and taxation benefits. In 1989 the value of cultural exports was estimated at $1.3 billion, which is an increase of 44 percent from five years ago.
[E. Barnes in the chair.]
In this province we can't afford to ignore the economic impact of cultural activities. Our cultural industries, with little more than a minimal subsidy from government, have recovered the public's investment many times over. In return for the $16.5 million, for example, that the province has invested in B.C. Film -- the non-profit agency that administers cultural grants for film -- the agency has generated
[ Page 8955 ]
$148 million in film activity during the last five years. Meanwhile, production budgets for films shot in B.C. totalled almost $370 million, of which more than $211 million was spent directly here in British Columbia.
Our book publishing sector paid out more that $3.4 million last year in salaries and wages. We need only look to B.C. Ferries and see the B.C. book publishers' stand in each of our ferries to know that our publishers -- about 178 of them all told -- are doing very well. We anticipate sales of over $1 million in B.C.-published books on the ferries. Figures like these legitimize the fact that public investment in culture can be nurtured, given access and opportunity. Through the establishment of a cultural foundation and in conjunction with the funding provided by government, we can expect to provide a strong and integral base of support for the cultural sector.
Through the management and establishment of this foundation, we can create a credible, well-managed vehicle for the administration of charitable gifts to culture. If we endorse this opportunity to increase outside investment in culture, we can continue to enjoy the economic benefits that it provides.
This bill acknowledges that the time is long overdue for broadening the base of financial support for culture in B.C. in a way that encourages community involvement, acknowledges the already significant contributions of the private sector through meaningful tax incentives and recognizes the vital and enduring role of culture in our society today. With these objectives in mind, I move that Bill 76 be read a second time now.
C. Tanner: In standing to reply to Bill 76, the Cultural Foundation of British Columbia Act, the Liberal caucus is generally in favour of this act, which mimics the hospital and universities foundation acts with one major exception. Hospitals and university acts specify the institutions to which the grants will be made. This act is broad-brushed, and it is vital that the minister exercise great caution in who she appoints to the board in order to ensure that they are not limited in their vision to a particular cultural activity or affiliated with any political philosophy.
The minister, we understand, has had discussions with the Vancouver Foundation, which is one of the top five foundations in North America, and has generally been seeking their advice and expertise. We commend the department for its willingness to be guided by this experienced foundation.
[3:45]
The Liberal opposition notes that the recipients of grants from the foundation must be in receipt of a government cultural grant for the year prior to the application and must also be applying in the current year. While we appreciate the necessary control this imposes on the applicant and the foundation, we would not condone this process as a method for the government to back off from its commitments to the artistic and cultural societies of the province. The Liberal caucus would see some merit in a matching grant from lottery funds for the first year of operations as an inducement to kicking off the foundation.
As I stated earlier, the official opposition thinks it is most important to appoint the right people and chair for the corporation to fulfil its mandate, and we will be vigilant in watching the appointment by the Lieutenant-Governor-in-Council. The Liberal opposition supports this bill in principle, and we reserve the right to make detailed observations on the 17 sections of the bill in committee stage.
L. Hanson: Bill 76 is obviously a copy of Bill 75 and accomplishes exactly the same thing. The purpose, as everyone I am sure is aware, is to allow public donations to fund the cultural interests of citizens of British Columbia, thereby gaining the tax benefits from that. I know that the minister has considered this and took part in the calculations they did to arrive at the necessity to bring in this legislation.
But in the simplest terms, there is a competing factor out there for this kind of money, particularly the universities and hospitals, which get the same benefit under the same section of the act. Now we will have the Library Foundation and the Cultural Foundation competing for that. I suspect that the benefits that the cultural arena is going to enjoy may have some effect on universities and hospitals and on other agencies that we already know are the benefactors of those kinds of gifts.
Be that as it may, I suppose a finite amount of money is going to be donated in any year or at any time, and there will be a number of agencies competing for that money. This act will in fact increase that competition and reduce donations to other agencies. Be that as it may, one of our concerns is that we wouldn't like to see, through the process of appointments, any particular sector of the cultural community take charge of the foundation so that the foundation wasn't truly representative of all of the cultural community but instead was representative of a specific group with a specific interest. I think we have seen some situations where that may have happened. I guess opinions vary on the merit and benefit of the recent purchase by the federal cultural community.
I hope that the minister will consider putting in place some kind of examination process so that purchases with these sorts of funds, if they aren't dedicated, would reflect a general interest of the public in a cultural object. I think everyone knows the issue I am referring to. It has recently been in the news, and I suspect that that particular organization may have been captured by a group with a particular interest that may not serve all of British Columbia.
We will be addressing a number of concerns when we get to committee stage, but with those reservations, the intent of the bill is not a bad intent that we can't support. By the same token, during committee stage we would like to voice some concerns about the specific initiatives in the project and how it is formulated.
With that, I think my colleague has a few things to say.
C. Serwa: It's a pleasure to speak on the philosophy and principles of Bill 76. I am appalled and disappointed that the minister responsible, in talking about something that features such a high profile in the
[ Page 8956 ]
province, would take a full 4 minutes and 30 seconds to speak about the importance of culture to British Columbians. I am really disappointed in that, and I have to believe that the cultural community in British Columbia is disappointed as well.
When we are talking about culture, one thing that we note in the passage of a civilization -- long after we have forgotten all their technological gains and advances -- is that we remember a civilization by its performance and standard of excellence in the arts, be they performing or visual arts, playwrights or authors. I come from a community rich in artistic resources, and I am very proud of that. We have the Okanagan Symphony, for example, made up of musicians throughout the Okanagan Valley. They tour extensively and perform classical music for the enjoyment of many thousands of Okanagan residents, and they have been very aggressive in utilizing any opportunity for their performance.
Here we go again, hon. Speaker. We have a government that does nothing but knock the business community over the head with rules, regulations and legislation, and with taxation initiatives that are bleeding the very essence of life out of the economy of the province. Then they have the audacity to turn around, cap in hand, and go out to the private sector and say: "Well, we feel that you should donate more money to the cultural community, because government, in its largesse, is not capable of providing the necessary support funding for the cultural community, and we have to hire more people." This is a rehash of the '72-75 period, when, in their largesse with taxpayers' dollars, the former New Democratic administration went throughout the province and bought all sorts of pictures that enhanced the visual artist community. I don't know if sculptures were included in that, but pictures, which had been hidden and forgotten in a vault, certainly were. With the recent flurry of activity, I see that some of the more horrid works of art have somehow surfaced briefly, only to be pulled back off the walls and reasonable pictures put up again. The public has a great deal of concern; look at what happened at the National Gallery in Ottawa with the expenditure of millions of dollars for works of art. The most recent acquisition was, apparently, a steal at $1.8 million or $1.9 million, because somebody placed a value of $5 million on it. It makes a farce of the whole exercise, when the money is thrown away in that fashion.
Culture is a very large part of our society, and the quality of life is directly dependent on the quality of the cultural environment around us. I don't for one instant believe that it receives the attention that it deserves. Part of the reason for that is that many of us have not had the opportunity to participate, whether it's in a school band...or perhaps through the educational process, to become more aware of the enduring value of the beauty of art.
When I look at the Cultural Foundation of British Columbia Act and recognize the tack the minister is taking, I might advise the minister that there are other options to create opportunities, especially with respect to the visual arts. For example, in British Columbia public buildings are going up with very little visual arts representation. It appears reasonable to conclude that many of the public -- and, I would think, private -- companies could be encouraged to dedicate perhaps 1 percent of their budgets to artistic aspects in their buildings, be they sculptures or other visual artworks.
We can take a number of tacks. Fundamentally, though, what is incredibly important is that the visual arts community make certain that the work they're doing has public acceptance. I'm a great believer that the artistic community cannot go spinning off in its own direction and believe that they can draw sustenance from the public or from the Crown. I think they have to be aware that there is a certain attitude that prevails, a certain expression of desire and a certain market for the type of art they produce. Even in the case of authors, there is a time and a place. The pendulum does swing, but an author has to be sensitive to the market. If the author is not sensitive to it, then the creation is an artistic creation -- but with a limited market. Then the originator of that artistic creation, whatever it is, has to recognize the limitations in financial success. That's part of the reality that prevails and part of the discipline.
On the other hand, I don't want to see a society where we tend to prostitute ourselves to the market, simply to become artisans, and rather than creating works of art, simply paint murals or scenes that contain mountains, moose and Mounties -- which is the standard of Canada -- just because they happen to sell. In my mind, that's not art. An artistic picture is a unique creation, not a series of creations on a theme. The work of a true artist is to be genuinely appreciated.
While I took a few shots at the National Gallery of Canada, it is also nice to recognize that they have established one of the finest collections of Canadiana of any art museum in Canada: historical art by artists who took a great deal of patience and painted native aboriginal scenes of several hundred years ago and early French-Canadian scenes in a wealth of detail, so that we can study them from our present perspective and see how the people lived at that time and what they had.
Art serves a wide variety of fields. You have to be sensitive to the merits of the philosophy and principles of this bill. I have concerns in this particular field, and I will probably talk longer than the four and a half minutes the minister took. Because of my constituents, I have a great awareness of the value and the importance of art to all ages of the community.
I have concerns about who will benefit from the acquisition of funds in the cultural foundation, because earlier this year we saw the government hand in hand with the unions promoting labour art. There is nothing really wrong with that, but are we promoting labour art because of its origin or the scenes depicted? If you look at the Union of Soviet Socialist Republics, now defunct, it really promoted that, not only in the visual and literary arts but also in the performing arts. If we embark on that particular exercise and if the directors of the foundation have that political orientation, then I would suggest that the confidence of any potential donor has to be diminished. I think other speakers said earlier that art really should be apolitical. Art is to be
[ Page 8957 ]
enjoyed by everyone. Because of that perspective, you should not try to impose some political will through the artistic community. I think that the minister is acutely aware of my concerns there, and hopefully shares those concerns.
[4:00]
I think the bill is well-intentioned, because it attempts to encourage more private sector donations to the arts and to cultural activities. We are all enriched, whether a performance in the performing arts is by a little theatre group or by a professional organization. In my community we have Sunshine Theatre, which puts on a number of plays in the summertime. The minister is quite right: it certainly is noteworthy that it is part of the economic activity of the community. It attracts tourists year after year for the performances, and certainly enhances the opportunity of the community to participate in good-quality entertainment. A number of those plays are very clever, and the quality of the actors is really outstanding, superb. So we all tend to be enriched.
While I agree that the philosophy and principles are well-intentioned, I suggest that the bill with its flaws will perhaps fail to deliver the type of fundraising vehicle that it's designed to achieve. Fundamentally, the potential donor has to have confidence in the foundation, confidence in the direction that it's going in, and confidence that it will represent a wide variety of interests -- all perspectives in the directors of the foundation. You are obviously going to have to have a foundation board that represents business interests, so that you have the experience of fiscal management if the foundation is going to be well managed. Artists are a strange group of people: they get self-infused with excitement, and they tend to be zealots in their particular field. Common sense and prudent management of affairs are generally overwhelmed by this positive excitement to want to do and to accomplish, and then we have what is often a legacy of debt that somebody has to pick up. It's not simply the artistic community; I think it's widespread. We know the fiscal problems the Vancouver Symphony Orchestra has. It has been bailed out by the provincial government, and it is still having difficulty.
There has to be some sort of opportunity to encourage prudent management and the selection of programs that appeal more to the large masses of individuals, so that they participate and become interested. Slowly, over a period of time, we encourage them to be more readily educated in the appreciative aspect of all the forms of art, and to become more ardent supporters. Whether it's a touring art gallery display or something else -- and we have a very fine art gallery associated at the present time with the Kelowna museum -- the community has to be encouraged.
The tax matters, which seem to be a very strong and significant aspect of the Cultural Foundation, as of the Library Foundation, are not anywhere near as significant as they would appear. It makes very little difference to the small donations, which I think the minister would hope to encourage through this act. To the large donations that will probably come in as bequests, it makes no difference at all. Fundamentally, what is of primary concern is the security of the fund as a living fund, as a legacy of the individual who really cares greatly and is willing to put their money where their mouth is in this particular case, to encourage and foster the artistic community throughout British Columbia -- whatever their specific field of interest would be. There are a number of aspects and elements with respect to the foundation other than relying simply on being 100 percent tax-exempt. Other than perhaps for some temporary problems of large corporations, I don't even see that occurring.
I feel that a great deal of diligence and care have to be exercised by the part of the minister in the selection of directors so that they represent all sorts of interests -- perhaps many elements of the artistic community as well as representatives of the business community and those who simply appreciate and value. It's a very significant and responsible task for a relatively small number of individuals.
I talked earlier about the National Gallery and some of the areas where it is losing its credibility among the public at large. This is a great concern of mine, if we are going to build a much stronger artistic community. If the representations to potential donors to the foundation are going to be successful, and if the representations for getting a greater allocation of provincial dollars for the artistic community are going to be successful, then the choices, and the selection of the venues, have to be made so that the public can readily understand and appreciate the art. The case of the National Gallery and the charade that has been carried on with the two acquisitions, one very recently and the other one a year or two ago, doesn't inspire a great deal of confidence in those who rise to the top echelons in the artistic community and who become influential in the choices. There are a number of concerns here, all of which relate to the credibility of the foundation.
In any event, I think it's clear that this bill requires input and approval from the community at large. It must meet the approval of the entire cultural community in the selection of directors. Whether authors, playwrights, performing or visual artists, it is imperative that that broad range of appeal be structured in order to make this act successful.
I will voice my concerns here while we have the latitude of exploring the philosophy and principles. As I have emphasized, one of the primary concerns is with the selection of the members of the Cultural Foundation. It is clearly a very important task, and if we are going to go through a charade of appointing NDP supporters who will continue as zealots in that field, then this initiative, no matter how well intentioned, is doomed to failure -- not to say anything to diminish the quality of those individuals; I have no difficulty with that. Gifts are given by the good Lord, and all individuals have that ability. Obviously, many individuals in society who support the current government are gifted individuals and have a strong background.... I am suggesting that if you have only those individuals represented in the foundation, you are not going to get the diversity that I would expect from either the artistic community or the public at
[ Page 8958 ]
large. Again, it depends how committed the minister is to the concept of encouraging and fostering this, and the first evidence of that will be the selection of the directors of the foundation.
We are well aware that it has to be seen as an agent of the Crown, and the Crown will have to appoint these individuals. I again emphasize that the appointments cannot be made simply out of the artistic community, but have to represent the global community, both the individual who appreciates art.... Hopefully, that same individual has some background in business experience so that prudent management of the fiscal affairs of the foundation are held well in hand.
I believe that the bill represents a good idea, but probably an idea that will not be successful unless some sensitivity is shown on the part of the minister for accommodation in the legislation when it's brought forward in committee stage.
In concluding my remarks, I appreciate this initiative. As I have said, there are other ways of encouraging the artistic community, and they all have to be utilized if we are going to build a strong artistic community. Hopefully, the minister is as committed to this as she appears to be, and that presentations will be made to the federal government, because it is my understanding that of the 12 provinces in Canada, we are twelfth in the line of federal assistance to the arts and cultural community. When the minister talks about constant dollars being the same as in the previous budget, I am not certain that is really saying very much. I am not aware of the commitment of the present government. I am well aware of the inflationary aspect of it and that the dollar really doesn't go as far as it used to.
With that, I will conclude my remarks -- to the joy of the Minister of Tourism -- and indicate that during Committee of the Whole we will be challenging the Minister of Tourism to modify the legislation to make it more responsible and more representative, thereby enhancing, I hope, the potential for success of the Cultural Foundation of British Columbia Act.
W. Hurd: I want to make reference to the tax and economic advantages of the idea of a foundation. I think it's significant to read into the record that, whereas a donation to a private charity is only eligible for a 20 percent tax deduction, 100 percent of the value of a donation to a foundation is tax-deductible, up to the amount of the income of the person donating the money. Contrary to the remarks from the hon. member for Okanagan West, I think the only people being milked are the federal government. Clearly this is a tax advantage.
One wonders how long the federal government will be willing to support the idea of a trust, established by the Crown, that appears to exist primarily for tax advantages. While the concept of encouraging donations in kind for artistic endeavours in British Columbia is good, I wonder whether the federal government, in due course, will look upon this as a form of reverse downloading -- something the government has talked about at length and that I think we in committee may want to explore in certain aspects of this bill.
But obviously the tax ramifications are the key reasons for both Bill 75 and Bill 76. I suppose one can't blame the provincial government, during an age of restraint, for trying to encourage this kind of donation when such a tax advantage exists at the federal level.
Deputy Speaker: The hon. minister closes debate.
Hon. D. Marzari: I believe the last speaker had it right. This bill presents a mechanism -- simply a mechanism, a tool, another means of developing new partnerships -- to pull money into culture and the arts. Many people around this chamber have spoken to the value of art to the community, how important it is and how we enjoy it at the local community level, right from the small performing theatre all the way up to the most famous artist doing a new oil or abstract. Everyone wants to speak to the value of our art, dance companies, symphonies, performing artists -- and the film community in British Columbia, one of the best in the world. People want to speak of the value of the cultural and economic contributions that the arts make.
[4:15]
But when it comes right down to it, what we need is an infusion of dollars into the arts such as the church provided in the fifteenth century, rich patrons provided in the sixteenth century, and the Canada Council and arts policies of various provinces in our country have provided over the last number of years. The time has come in the 1990s for us as provincial taxpayers to look to other sources of funds for the arts. One of those sources is most definitely -- in our case most particularly -- our federal government.
Do you know that British Columbia has 12.5 percent of the total population of Canada? In fact, we contribute a tremendous amount to the arts across this country. Our artists are renowned across the country and internationally for their dance, visual and literary arts. We have contributed a great deal. Yet the funding we receive into this province from the federal government for the arts is something like 5.5 percent of the total contribution the federal government makes to the arts across this country. This has been a longstanding relationship, and it's one this government has attempted to redress.
We are basically attempting to put out new vehicles, create new mechanisms and develop new wheels for the car, so that this province, British Columbia, can develop new working relationships with different communities within B.C., and most particularly and emphatically with the federal government. By developing this foundation, we are in fact creating a vehicle. By not collecting revenue, the federal government is in fact putting money into our pockets for culture, and this vehicle, the Cultural Foundation of British Columbia, does that. We cannot say at this juncture how much money this vehicle will collect or whether or not it will be successful. But it is absolutely imperative that this foundation have the credibility that the opposition and the third party speak about. It is absolutely imperative that this foundation be accountable. And these two basic criteria are built into the structure of the act itself.
[ Page 8959 ]
Money that is granted by the foundation will have to be tied into provincial grants and the provincial granting structure which, I may add, has been operating diligently in this province for many years. Most notably, the Arts Board of British Columbia is a group of basic volunteers who are brought together three or four times a year to adjudicate and do peer review on everything from performing arts and festivals to visual arts and literary arts in our province. It's a very credible operation, a very efficient operation and a very underfunded operation. But the Arts Board of British Columbia has developed, I believe, an accountability and a credibility across this province and across the country as well.
Nothing in this foundation flies in the face of what we have already done. Nothing in this foundation detracts from the credibility that arts funding in this province already has. Nothing in this foundation takes away from the infrastructure or from existing funding patterns. In fact, everything in this foundation enhances, facilitates and puts us in British Columbia one step forward -- in fact, one step ahead of many other provinces -- in terms of attracting federal money to this new vehicle that we have created to create a new partnership.
I thank the opposition and the third party for having raised their concerns and for having gone through the bill. What concerns me now is whether or not they have the gumption to go to committee stage now, so that we can all put our money where our mouths are and say yes to this bill at committee stage. Let's put the concerns on the table clause by clause right now, this afternoon, while the cultural services branch and finance staff are waiting. It's time to open the egg and scramble the omelette, and I ask my colleagues on the other side of the House to agree with me when I move that the bill be referred to a Committee of the Whole House to be considered, by leave, now.
Deputy Speaker: Hon. minister, I would ask the member to make the first motion on second reading, and then we will get to....
Hon. D. Marzari: I will repeat the motion that Bill 76 be read a second time.
Motion approved.
Hon. D. Marzari: Hon. Speaker, I ask leave to move that the bill be referred to a Committee of the Whole House for consideration forthwith.
Leave not granted.
Hon. D. Marzari: Bill 76, Cultural Foundation of British Columbia Act, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.
Hon. T. Perry: I call committee on Bill 77.
ENGINEERS AND GEOSCIENTISTS AMENDMENT ACT, 1993
The House in committee on Bill 77; F. Garden in the chair.
Section 1 approved.
On section 2.
H. De Jong: If the minister could give it, I would like a simple clarification of section 2 as to who is exempted. I have some difficulty understanding whether the work done by the engineer is $25,000, or the work in total is worth $25,000, whatever the engineer has engineered.
[M. Farnworth in the chair.]
Hon. T. Perry: I am not sure which part of section 2 the hon. member is referring to. If he could clarify his question it would be easier for me to respond.
H. De Jong: The area that I am concerned with is whether the exemption is based on the amount of work done by the engineer himself and in the engineering plans, as to the $25,000, or whether it is the actual construction value that is being engineered by the engineer that would exempt him to a total of $25,000.
Hon. T. Perry: We are removing that exemption, which would be for the total construction. The existing section is contrary to the B.C. Building Code, which governs type of work, not the value.
H. De Jong: Then I don't understand removing the section that says anyone who wishes to take up insurance is in the ball game. Will people have the confidence and assurance that should something go wrong on any type or amount of engineering to be done, or drawings to be made, they are covered by insurance? All the rest of them -- anyone who chooses not to provide that, or who is not taking off that insurance -- will have to state so to the customer they are dealing with.
Hon. T. Perry: The disclosure of liability insurance comes up under another section. In this section, we're repealing the existing section 2(4) of the statute, which is contrary to both the B.C. Building Code and municipal bylaws that require an engineer to be involved in certain types of work. You can't say that the public safety would be compromised just because the value happens to come in at less than $25,000. Where the Building Code or municipal bylaws for good reasons require an engineer, it's the importance of the work to safety or good design that counts, not the dollar value.
Section 2 approved.
On section 3.
[ Page 8960 ]
G. Wilson: I have just two very quick questions on this section. The first is with respect to the appointments. It seems rather convoluted, given that section 3(9.2) simply says that there has to be a letter ballot, and that you essentially have to elect half of the members each year. I wonder why we have this split term stipulated in subsections (9), (9.1), (9.1)(a), (9.1)(b) and (9.1)(c). It seems that the act has complicated a fairly simple procedure. I think I understand what's intended: you essentially have a split election so that you have half-and-half. It's covered in subsection (9.2.) Is the balance simply there for transition? It seems that it could have been done by a simple regulation for the bill, rather than by putting it in the body of the bill itself.
Hon. T. Perry: Yes, this is transitional, and the basic intent is to ensure continuity so that you don't potentially turn over all the members on a governing council at once.
G. Wilson: Is that consistent with the way it currently operates? This is really not a major departure. In reading it, it seems unnecessarily complicated. It strikes me that that is the way it proceeds now, so really we're not deviating at all from the norm. Is that correct?
Hon. T. Perry: That's correct. This is at the request of the engineers, and it's completely consistent with existing procedure.
Sections 3 and 4 approved.
On section 5.
G. Wilson: Again, I have just a very quick question to the minister with respect to striking out "Provincial sScretary" and substituting "minister." Recognizing that it is literally just a housekeeping question, why was the striking out of 30 days and the substitution of 45 days implemented in section 5(b)? I recognize that the first section is strictly housekeeping.
[4:30]
Hon. T. Perry: Basically, although we try to give the best possible service, sometimes turnaround time is hard to achieve in 30 days. If the mail is slow or the minister is away on holiday, out of the country or preoccupied with something else, it gives us a little more room. Virtually never would such bylaws be of urgent importance. Again, it's with the consent of the association.
Sections 5 and 6 approved.
On section 7.
G. Wilson: Section 10.1(1) recognizes that "The council must issue a certificate of authorization to a corporation, partnership or other legal entity for the practice of professional engineering...." I wonder if we could have a definition of "legal entity," as to whether or not that would allow for an unincorporated practice. In fact, it might not be in our interests to have that under certificate. What exactly is meant by the term "legal entity"?
Hon. T. Perry: Again, this section, like all of the bill, was interpolated at the request of the engineers and geoscientists. It would be any other legal entity providing engineering services -- for example, a municipality.
G. Wilson: That was the answer I was looking for: whether or not it constitutes.... A municipality or regional district could have on staff people who would perform the duties of an engineer and therefore presumably would be certified in that category. The answer to that -- I see the minister is nodding -- is yes. It might be nice if we had that, simply for the record.
Sections 7 to 12 inclusive approved.
On section 13.
G. Wilson: Section 13 is two sections, essentially, with sections 24 and 24.1 repealed, and a new 24.1, which deals with complaints and investigations. I have some questions with respect to this. In second reading I mentioned that I would be raising a couple of questions on it. It says: "If the association receives a complaint against a member, licensee or certificate holder, the registrar must designate a member to review the complaint." If you look at what has to transpire subsequent to that, I wonder if it may not put the registrar in a rather powerful and even potentially conflicted position, depending on the nature and circumstance of the complaint. If the minister would spell out how this new complaints and investigations procedure works, it might give us some clarification, and we could move on.
Hon. T. Perry: I'll take a stab at it, although I'm not an expert in the procedures of the association. This is not a new provision. The purpose of having a self-governing association like the Association of Professional Engineers and Geoscientists is that it will protect the public. It is the job of the registrar to ensure that when complaints are made, they are appropriately investigated. The only thing new about this section is that it's amended to include certificate holders. I think the reason for defining certificate holder to include a former holder of a certificate is that someone could not escape review or investigation simply by virtue of letting their certificate lapse. This is entirely consistent with good disciplinary practice.
G. Wilson: I don't take issue with that. Any time there is a self-policing or self-regulatory authority, one has to be very careful that an even application of review is provided in all cases. It seems that the registrar doesn't have any choice -- and I think that is good -- under section 24.1(3), which suggests: "If an inquiry under section 24.4 is not held in response to a complaint, the council must have the complainant, and the member, licensee or certificate holder against whom
[ Page 8961 ]
the complaint was made, informed of the reasons." Presumably, that means there has to be some procedure, which I would argue has to be covered under section 24.1(2): "If after the review the member designated under subsection (1) considers that further investigation is warranted...." At some point some review has to be undertaken to make the decision whether or not to proceed -- some form of discovery or hearing. Reading this, I am a little confused as to how it is intended for that to take place. It's quite clear -- if you look at section 14 and section 15, which talks about how the discipline committee acts and decides -- that it is fairly straightforward. How it proceeds from the point of complaint to the point of internal discipline is the point that we would like some clarification on.
Hon. T. Perry: The essential point of this section is to include certificate holders, which now means not simply an individual professional engineer or geoscientist; it could be a company.
The detailed procedures are spelled out in the bylaws of the association. I will attempt to take a stab at it again, emphasizing that although I am the minister responsible, I am not an expert in these procedures. It is both conventional and appropriate that when a complaint is made, an initial relatively informal investigation is made to see whether there is substance to the complaint. For example, a complaint may be trivial; it may be completely unfounded on matters of fact; it may be so obviously serious that the member designated under this section can recommend to the registrar that very stern disciplinary measures be taken promptly. It is not unusual to ask a distinguished member of the profession to undertake such an initial review of the circumstances. The section provides -- which I re-emphasize -- extending this existing practice to companies as a flexible mechanism to make an intelligent investigation.
In an earlier section we approved the provision of increased lay representation to ensure that where the public had concerns, the professional body ought to be seen to be exercising its role of protecting the public. That is reinforced by increasing from one to four the number of lay people on the council who oversee this procedure.
G. Wilson: Under that section, then, if we look at the act as we see it now, ostensibly the minister is suggesting that the only difference is that the report is going to be assigned not only to the complainant, but the member, licensee and certificate holder. Is that ostensibly the only change, and other than that, the same procedure is followed?
Hon. T. Perry: Yes, that's correct.
Sections 13 and 14 approved.
On section 15.
G. Wilson: In section 15 we are essentially looking at the discipline committee and how it functions. Perhaps the minister could point out through the addition of subsection (6).... In the existing act, if you look at the discipline committee in terms of its structure with respect to the panels -- and I am assuming that we don't need to go back and review all of the existing act, but for the purpose of this debate -- the committee may refer a matter before it to a panel. A matter that is before a panel may be referred to the discipline committee or another panel, or an appointment to a panel may be terminated, and so on. Then it suggests under what is being added here that:
"If the discipline committee considers that a delay in holding an inquiry under section 24.4 concerning a member, licensee or certificate holder would be prejudicial to the public interest, the discipline committee, without giving the member, licensee or certificate holder an opportunity to be heard, may suspend the membership, licence or certificate of authorization, or restrict the scope of practice, of the member, licensee or certificate holder, pending an inquiry and decision under section 24.4."
That is a fairly major departure, and it may not be bad; I am not saying that it is. But if you look at it in relation to subsections (7) through (11) that are also added onto this bill, it does provide an opportunity for this discipline committee to have a great deal more power and authority than it does right now. You have to be very careful whenever a pseudo-judicial authority in the province is given the right to suspend a licence without the certificate holder having an opportunity to be heard. In British Columbia we have to be a little careful about that. Maybe the minister can tell us why that would be permitted under this act.
Having said that, I would like to look at a couple more subsections under section 15.
Hon. T. Perry: Like the whole bill, this section was requested by the Association of Professional Engineers and Geoscientists, and supported by the Applied Science Technologists and Technicians of B.C. I think they are trying to learn not only from the Closkey commission report, which called for stricter protection of the public, but I surmise that they are also trying to learn from the experience of other professions. For example, the recent experience of the College of Physicians and Surgeons has taught that sometimes the regulatory processes of that profession and the interaction of that profession with the courts have not provided timely protection to victims of unprofessional conduct. This section is intended to be reserved for an extreme circumstance where action by the association is required to protect the public interest. Of course, in section 15(7) of this bill, provision is made for review by the Supreme Court in the event that the licensee, member or certificate holder feel that their rights have been prejudiced.
G. Wilson: I guess this is where there is a bit of concern. I am well aware that this bill has been drafted, in large measure, by the professional engineers. Nevertheless, I think that it is the role of government, and of the opposition, to look after the interests of the public, not the interests of any particular group within the public. We have to be careful that we don't simply allow any particular special interest group in the
[ Page 8962 ]
province to draft their own legislation and pass it because they think it is a good idea. I am not suggesting that we have necessarily done that here. In this, subsection (6) moves to subsection (7), where the discipline committee decides to act under (6), and there is a right of appeal to the Supreme Court, which is potentially time-consuming.... Perhaps, hon. Chair, I should wait until the Minister of Labour has finished with the minister, so that the minister might be able to participate in debate.
The Chair: Continue.
G. Wilson: In subsection (7), the question is an appeal to the Supreme Court, which could be a lengthy and expensive proposition. It then suggests that the suspension of a membership, licence or certificate under subsection (8) is not effective until the earlier of either the receipt of a written notice or three days after written notice is mailed to the member. It says, "mailed to the member." It doesn't say that the member has received it, and that's of some concern. In terms of the legalities of it, I question why we would want that and why the notice "is mailed to the member" as opposed to "has been received by the member."
[4:45]
I don't notice anything here that suggests that there is an internal appeal process that might be able to nip the suspension in the bud -- if I can use those terms -- without moving to a major litigation process in the Supreme Court. The minister might argue that the suspension of a licence isn't going to happen unless there is a really serious issue here, so that this is not something that would be done lightly, and I recognize that. Nevertheless, where you have an authority within a pseudo-judicial body like this to withdraw a licence to do business -- and this is going to have a major effect on an individual or on a company because they will essentially be out of business -- there should be some form of internal appeal that might bypass a very lengthy and expensive Supreme Court challenge.
On those two points, I wonder why you would have in (8)(b) that it's three days after written notice is mailed to the member, because the vagaries of the mail system are not always useful. And secondly, why would there not be some kind of internal appeal process that could bypass a rather expensive Supreme Court challenge?
Hon. T. Perry: Again, I emphasize that the purpose of the act is primarily to protect the public, and the purpose of the amendments to the act is to strengthen the protection of the public, which has been found to be wanting or imperfect. I think the intent of subsection (8) of section 15 regarding suspension of membership is that the association will make a reasonable attempt to notify the member, which is due process. Normally under such circumstances letters are sent by registered mail and are delivered on time. It's the obligation of each member of a professional association that is self-governing to keep the licensing body aware of one's address of record and practice. In the event that an engineer or geoscientist absconds, the association can't be held to account for failure to deliver the letter.
This is something, again, which the engineers have requested. The disciplinary committee is typically made up of very senior members of the profession, and I think experience teaches us that they tend to be rather conservative and err on the side of caution. One hopes that it would be a very unusual event that takes this course.
G. Wilson: I know a bunch of geoscientists and engineers who are actively working on my campaign and are liberals -- absolutely in every sense.
I understand what the section is all about. Nevertheless, whenever you empower a body.... I don't want to belabour this point; I am just trying to be very clear for the record. Subsection (6) is basically about a disciplinary committee. It empowers this committee to restrict the practice of a member, licensee or certificate holder, pending an inquiry and decision. This isn't somebody who has been found guilty -- at least as I read it. It's pending an inquiry. Maybe this isn't a good one, but for want of a better analogy, it's kind of like a roadside suspension because of a suspicion that you are under the influence. Until you are proven to be under the influence, they suspend your licence in the interests of public safety, because they think that you are going to do some damage. It seems to me that that's where we are at, if that's a reasonable analogy.
I don't think that's necessarily bad; it is probably useful to have. But if that power is going to be granted, you have to be absolutely clear that you don't allow it to be used one step further where, pending any proof that there is a problem, you can effect an unnecessary delay or an unnecessary set of circumstances for whatever reasons. It could put this person out of business, even though they may be found not to be under the influence -- if I can go back to my original analogy. A roadside suspension is quite different from saying: "We're going to revoke your licence, and you're going to have to challenge us to get it back." Does the minister see my point?
This says that, pending this investigation, your only course of appeal to get your licence back is through the Supreme Court. Isn't it better to recognize that there should be some internal mechanism for appeal, pending this inquiry? Once the person is guilty, I understand it -- no problem -- but this is pending an inquiry.
Hon. T. Perry: I think we have to recall that the alternative to professional self-regulation is direct regulation and protection of the public by government. Professional self-regulation is a privilege granted by law to professions on the understanding that they are likely to be able to protect the public more effectively, more efficiently and more constructively than government can directly. It's not perfect.
The reason that we are amending this bill is that experience has taught us, through the Save-On-Foods' roof collapse in Burnaby and the subsequent Closkey commission investigation, that the existing regulatory procedures were imperfect. We know from the
[ Page 8963 ]
regulatory experience of other self-governing professions that they are far from perfect as well.
We're talking about an interim judgment made by a very distinguished committee of peers at arm's length from government exercising the autonomy of an ancient and very important profession -- not the oldest profession, but a very ancient and important profession. Perhaps an example might serve to illustrate the point. Were an engineer to become compromised by alcoholism, drug addiction, Alzheimer's disease, psychiatric disturbance or personal problems and begin to practise unsafely, it would be derelict for the association not to curtail a practice that might result in unsafe conditions for members of the public. They must have the ability to intervene in such exceptional circumstances. It goes with that, that under principles of natural justice, it's also incumbent upon such bodies to proceed fairly. Their proceedings are subject to review ultimately by the court, and they ought to proceed in a timely way. I think we can expect that they will do so.
G. Wilson: On the advice of the Chair, I won't get into the debate as to which is the oldest profession. I take that advice wisely.
Coming back to this particular section, I guess that's fair enough. I think we need to point out that this is a fairly onerous power to be providing, one that has to be looked at with great care. Whenever legislation is enacted that gives an authority to that group, I think it's important that we stipulate that this is a body empowered to put in place a restriction on individual liberty to practice. Therefore that's a power that should not be wielded lightly but has to be looked at and used with extreme care, notwithstanding also -- and I take the minister's point -- that if the public safety is abridged as a result of those actions, there's a need to be able to act.
Let me ask my last question on this section. Subsection (11) says: "A discipline committee member who takes part in the decision under subsection (6) must not sit on any inquiry or appeal with respect to any matter that was the subject of the decision taken under subsection (6)." Essentially you're suggesting that if a person in the discipline committee is making a decision to move forward to an inquiry, that person -- who may have heard that initial evidence -- then is no longer able to pursue that matter with respect to the inquiry itself. I question, in the provision and review of evidence, if that's a wise move.
It seems to me that there may be reason why there would be some consistency in terms of those who are reviewing documentation and evidence because of knowledge of the event. I can see the other side of the coin. But could the minister tell us why that was done?
Hon. T. Perry: This is an attempt to address precisely the concern that the leader of the Liberal Party raised a moment ago: every reasonable effort should be made to avoid the appearance or reality of prejudice or bias. The person subject to prompt disciplinary or regulatory action ought to have the chance for an entirely fair subsequent hearing, at a more leisurely time, by people who had not participated in the initial decision.
Sections 15 and 16 approved.
On section 17.
G. Wilson: With respect to section 17, I have a very quick question with respect to section 24.41, "Court ordered production." This new addition allows the council to apply to the Supreme Court for any record or things relevant to an investigation or review.
I don't understand why that provision wasn't in the original. There has to be some reason why there would have been some provision not to have that included, and I wonder what has precipitated the inclusion of that. Could the minister just let us know why there is a need to provide the right of application in legislation as opposed to having that in the normal course of an investigation?
Hon. T. Perry: I'm not sure I understood the question. Let me try answering, and that will perhaps tell us if I understood.
The association in its disciplinary committee must have access to all the facts to be able to make an informed decision. The intent is to avoid or prevent the situation in which material evidence might be withheld.
G. Wilson: I understand that. But it would seem that this would have to be after the fact. If some evidence is presented before the Supreme Court and the Supreme Court makes a ruling on that, then presumably we're looking at something that would happen after the fact. I wonder why that evidence would not just be available as a matter of course. I don't understand what the relevance of the particular section is. Why would that evidence not be available as a matter of course? I would have some real concern if we're dealing with a matter that is currently before the Supreme Court and disciplinary action or some form of investigation is being taken by that committee.
[5:00]
Hon. T. Perry: Let me try to illustrate again by an example. A number of years ago the College of Physicians and Surgeons of B.C. moved to emulate the practice of the Quebec college of physicians and surgeons. In the 1970s they caused an uproar in the practice of medicine by announcing that they would require inspection of patient records to ensure competence on an ongoing review basis by physicians. Initially, that was done on a voluntary basis. It's now widely accepted. At first, there was concern that this represented an invasion of privacy, but the fundamental principle was that for the disciplinary and regulatory body to be able to judge competence, it had to be able to see all the relevant material. It could not countenance the selective withholding by a practitioner of material that might be damaging.
This section will allow the association to review or investigate "...the conduct of a current member, licensee, or certificate holder or for a review of the
[ Page 8964 ]
professional practice...." That was recommended by the Closkey commission as a step to ensure the enhancement of competence of engineers and geoscientists. This will ensure that the association can make a thorough review of the practice.
Sections 17 to 23 inclusive approved.
Title approved.
Hon. T. Perry: Hon. Chair, I move the committee rise and report the bill complete without amendment.
Motion approved.
The House resumed; D. Streifel in the chair.
Bill 77, Engineers and Geoscientists Amendment Act, 1993, reported complete without amendment, read a third time and passed.
Hon. C. Gabelmann: I call committee on Bill 38.
EMERGENCY PROGRAM ACT
The House in committee on Bill 38; M. Farnworth in the chair.
On section 1.
Hon. C. Gabelmann: I move the amendment standing in my name on the order paper.
[SECTION 1
(a) in the proposed subsection (1) by deleting the proposed definition of "disaster" and substituting the following:
"disaster" means a calamity that
(a) is caused by accident, fire, explosion or technical failure or by the forces of nature, and
(b) has resulted in serious harm to the health, safety or welfare of people, or in widespread damage to property;, and
(b) in the proposed subsection (1) by deleting the proposed definition of "emergency" and substituting the following:
"emergency" means a present or imminent event that
(a) is caused by accident, fire, explosion or technical failure or by the forces of nature, and
(b) requires prompt coordination of action or special regulation of persons or property to protect the health, safety or welfare of people or to limit damage to property;.]
On the amendment.
Hon. C. Gabelmann: If I may say very briefly -- I won't take any time on this -- it became evident during second reading debate, from commentary made by members of the opposition, that there was a concern that the bill could deal with civil unrest. Given that there was never any intention of that possibility, it became clear to me that the best way of making that clear was to make the amendments we've made.
Amendment approved.
Section 1 as amended approved.
On section 2.
A. Warnke: First of all, on section 1, which, of course, has quite an effect on the rest of the bill, I want to compliment the Attorney General for making the amendment. As could be evidenced, that certainly satisfies our concern over here.
With regard to section 2, this is the first reference to a minister with a lower-case "m." Here I want to point out that the current legislation stipulates that the Minister of Environment is responsible for the administration of the act; however, the Attorney General has been administering the act for several years -- I suppose, or for some time. The generic term "the minister" is used in the bill in the event that the program is moved to a new ministry. Nonetheless, what I'm seeking here is some clarification by the minister as to what is meant by "the minister," in the event that there is some confusion out there. Perhaps it needs to be clarified.
Hon. C. Gabelmann: Given the amendments of a decade or so ago to the Constitution Act and the ability of cabinet to reassign responsibilities among ministers, to create new ministries and to vary structures and responsibilities of ministries, this kind of wording seems appropriate. The Attorney General is currently responsible for the Emergency Program Act. A few years ago, when we had in place a Solicitor General, the Solicitor General was responsible. Originally, in 1951, when this act was.... There was an amendment in 1960 which may have changed the responsibility for the legislation, so I'm assuming that the change to the Minister of Environment was made in 1960. But it seemed clear that not to specify a particular minister is more logical in terms of government organization. There is no intention to move the responsibility to any other location as a result of this amendment.
Section 2 approved.
On section 3.
L. Fox: This is the section that gives the minister the authority to appoint committees. As I understand it, this is a new section. Would the minister give me some idea as to what the criteria would be for appointing a committee? We are not talking about one committee here; we're talking about a number of committees. What is the rationale behind appointing these committees? Will there be numerous regional committees or will there be one provincial committee? Or are all these municipal and regional structures going to request official sanction by having the minister actually appoint them.
[ Page 8965 ]
Hon. C. Gabelmann: In the original legislation there was a cabinet committee which provided advice. The thinking here is that it may be necessary or advisable to establish an advisory council or committee to the minister and the program for the conduct of its activities. That's one kind of committee that could be established. No decision has been made about that yet.
Secondly, in the event of particular, ongoing issues -- let's say, for example, a continuing problem with chemical spills on railways, which create a problems in various communities -- it might be necessary to establish a committee of advisers to the program to find ways of helping to deal with those kinds of problems.
So it's really an enabling section that clearly says "may" appoint. There is no desire here to do anything more than to ensure that we get the best advice possible in situations where we need that advice from the community.
L. Fox: Just one follow-up question, hon. Chair. Section 3(2) states: "The members of committees appointed under subsection (1) who are not officers or employees of the government...." In many areas of the province, the people with the expertise in those respective areas could in fact be employees of the government. They are a resource of expertise in many small communities. This appears to negate the opportunity to utilize a local resource in a local situation. Is that not a concern to the minister?
Hon. C. Gabelmann: As I read section 3(2), it is simply to ensure that public service employees who are appointed to committees aren't paid expenses or a per diem for attending meetings, as other people might be -- like volunteers from the community, whose expenses we might cover. We're not going to pay a public servant's expenses to attend committee meetings. That will be in the normal course of the duties of their employment. That's what I read this section to mean. We're not talking about providing a living for anybody out of this; we're talking about reasonable expenses. The wording is really quite clear. It says: "...reimbursed for reasonable travelling and out of pocket expenses...." If the member is suggesting that we should put more money into this pot, I'm not agreeing. But maybe I didn't hear him correctly.
L. Fox: Well the last thing I'm doing is suggesting that you should put more money in government employees' pockets. What I am concerned about is that you may have a situation where you have committee members who are government employees, but the meetings may be on weekends to deal with the issue and to accommodate some sectors. Under the contract or the arrangements of employment of those government employees, should they be there? Given that you are not prepared to pay them reasonable travelling or out-of-pocket expenses to go to a meeting, does that suggest that they have to be on the government payroll or call-out time or whatever the requirements are? You are suggesting by this that they are going to be paid outside the normal employment arrangement and that they are not going to qualify for out-of-pocket expenses for personal travel. If this meeting is not in the normal working hours and goes into a weekend, are we then requiring individuals to go beyond their normal employment and not be available for remuneration?
[5:15]
Hon. C. Gabelmann: No, this happens all the time with public servants. I think most of us know the reality of working life for public servants in this province. Many of them are called out on weekends or evenings. If they are in the bargaining unit, there would be provisions in the collective agreement to deal with how they get their expenses covered in non-fixed working hours. If they are not in the collective agreement, it is standard procedure for government employees to work seven days a week and often more than their eight hours. We know that around this building, I'm sure. There's no problem here.
Section 3 approved.
On section 4.
R. Neufeld: I have just a quick question on section 4(2)(f), where it says "review and recommend modification of local emergency plans of local authorities." Would it not be more prudent for the minister or the governing body to approve those plans? There are quite varied plans in different communities, and obviously a lot of authority goes along with this act. I'm not sure what was there before, but maybe it was that the minister should approve those plans instead of just suggesting modifications.
Hon. C. Gabelmann: The wording here is at the request of the UBCM. They wanted the wording "review and recommend modification." We are asking local governments to establish plans. We may have some advice for them as a result of their first cut at it. We then recommend back to them rather than forcing them to take a particular plan. It continues the kind of relationship that we want to establish with them, which is working together. No one is forcing anybody to do anything they may not want to do.
Section 4 approved.
On section 5.
A. Warnke: What requires clarification in this section is the use of the term "person to develop plans." The ministry has indicated that the intent is to require an individual to develop a plan if, for example, there could be a landslide on an individual's private property. Under this stipulation, the cost of such a private plan would be covered by the provincial government. I'd like to ask the minister: will the provincial emergency program be extended to include private companies, such as chemical companies, pulp and paper companies, and so forth?
[ Page 8966 ]
Hon. C. Gabelmann: There is no suggestion in the wording that there would be any payment to a private company that would be assisting us. Members will remember that the Environmental Assessment Act has the requirement for private companies to develop their own plans in respect to hazardous material. I know there is a national program called WHMIS that deals with much the same kind of issue. We are talking about an issue that may develop, and a person -- perhaps a corporation -- may be asked to participate in a particular plan, but there is no compensation provided by way of this statute.
Section 5 approved.
On section 6.
A. Warnke: As we have described in second reading on this bill, about 15 percent of all the province's local authorities do not have a plan in place. There are many reasons for this. Right off the bat I can think of a few authorities that simply do not have the finances to embark upon such a plan. In that case, it forces us to ask about the commitment by the provincial government to help them out -- the wherewithal; how to go about it.
There is also the question of the difficulty in dealing with a region. A region may have a very complicated geographical difficulty in trying to implement such a plan -- comprehensive policies and so forth, and we can think of our northern communities. We have a situation where a commitment is made, as a result of this bill, that all local authorities have to embark on an emergency plan and have that emergency plan in place. I would like to have clarified the time frame by which we could ensure that an emergency plan is in place in all local authorities. Is there some sort of deadline involved? On the question of finances, how do we ensure that a plan is in place that includes all authorities? In case there is no compliance -- or the inability, one could argue -- what are the penalties for such plans not being in place?
Hon. C. Gabelmann: Ninety percent of the local governments now have one form of plan or another. The ministry makes grants available to local government to help develop plans. In this fiscal year we are looking at something in the order of $380,000. In addition to that, we provide about $650,000 to local authorities for training. A fair amount of cooperation already exists between local government and the provincial emergency program.
What's our target? We're looking at six months following proclamation to try to get everybody on board. It doesn't necessarily need to be a major exercise for a small community. It may be a very straightforward matter of having a simple plan -- a designation of persons responsible for particular activities.
What's the penalty? A municipality wouldn't get any grants from us for their ongoing programs if they refused to develop a plan. I can assure the member that the discussions with local government through the UBCM have indicated a total desire to participate in a positive and constructive way in proceeding, and I don't anticipate that anyone will be trying to avoid participating with us in this legislation.
A. Warnke: I would actually have to agree with the Attorney General that I do not anticipate any opposition to this, not to the point of declining, but I suppose the possibility is always there, and it's good to have that clarified. On the whole, I agree with the Attorney General.
There is one area I want to explore, following the Attorney General's answer, and that is his emphasis on a plan having the appropriate personnel in place rather than on a comprehensive system. In that kind of context, is it really necessary to illustrate any sort of major exercise in emergency planning? My impression is that it does not. It's just simply the plan and the people in place.
Hon. C. Gabelmann: It takes more than a plan and more than an organizational structure in place to respond to an emergency. We do encourage exercises -- to pick up on the member's word -- so that people who are involved can practise what they might do should an emergency occur. We work with them in that respect, and it is like volunteer fire departments in communities. They practise every week. In my community it used to be every Wednesday night, and I suppose the same kind of practice still goes on in most rural communities. Similarly, we would expect the same kind of approach to their responsibilities -- though maybe not with the same amount of activity as the volunteer firefighters.
A. Warnke: During second reading debate a concern was raised about the prospects of downloading of financial commitments to put the necessary plan, organization and personnel in place -- especially personnel. There is obviously some expense involved here. During second reading the concern was expressed that perhaps the way the bill is structured is a way of downloading the financial responsibility on the local authorities. I wonder if the Attorney General could elaborate on that point.
Hon. C. Gabelmann: I know concerns were expressed about using this device as a downloading of costs onto local government. I think they are answered in the way the UBCM has participated with us in this legislation. They agree with it and are proceeding. If they had a concern about downloading, we would all have had correspondence from the UBCM or various municipalities about it, and we haven't. That's an illustration that they know there's no intent here to do any downloading.
The provincial emergency program staff will be available to assist municipalities in setting up their plans and to help them with their training. In addition to that, we provide grants to the municipalities -- it's not a lot of money, but there are grants available. There may be some additional resources required on the part of some municipalities if the village foreman or some other staffperson in the local government has to devote
[ Page 8967 ]
some attention to this issue. There's an obvious payback should some tragedy or disaster occur down the road.
A. Warnke: I have just one short question about what the minister said about the assurance or support from the UBCM. In what form did the UBCM express this? Was there any written commitment or correspondence with the ministry?
Hon. C. Gabelmann: The Union of B.C. Municipalities organized a committee of representatives of various municipalities. There were seven municipalities represented and it was that group, on behalf of the UBCM, who concurred with what we're doing.
L. Fox: I have some concerns. A local authority is now considered a regional director as well as a municipality, or as well as the regional district itself. Section 6(2) suggests that: "A local authority must prepare or cause to be prepared local emergency plans...." I recognize the variance throughout the province in terms of both the geographical size and the number of people within a respective regional director's area. When I look at what will happen in fact in many of the rural areas -- where a regional director has very little population and even fewer services to provide to these kinds of people -- and having gone through developing local emergency plans as a mayor several times, I know that it is a rather onerous job. I am concerned here. It appears that the regional director is out on his own. The minister is shaking his head, so perhaps before I continue I will allow him to clarify that.
[H. Giesbrecht in the chair.]
Hon. C. Gabelmann: Perhaps we can cut the debate short here. The local authority in this instance would be the municipality itself and regional districts, not regional directors. The concern the member has about a fair amount of responsibility on the shoulders of a regional director is dealt with later on. The member for Okanagan West has proposed some changes in the wording, which we will get to in, I think, section 12. But in this section we are not talking about regional directors, and we are not talking about someone who is in charge of responding to an emergency; we are talking about someone who is responsible for setting up the structure. That would be the regional district.
[5:30]
One more word on that. Some regional districts have a small population and do not have a lot of resources. I have one within my own constituency, Mount Waddington, which has a total population of less than 16,000 people. Staff are very small. There's no doubt at all that they will be able to comply with this legislation in the same way a small village with a similar number of staff would be able to respond.
L. Fox: My definition of "electoral area" is represented by a regional district member. Perhaps when we look back at the definition of "electoral area," it has the same meaning as in section 766 of the Municipal Act. As long as I'm assured that we're not talking about an electoral area being the single identity within a regional district, then I don't have a problem with it. But my reading of this is that we are talking about a single electoral area within a regional district.
Hon. C. Gabelmann: If the member would go back to section 1 of the bill and look at the definition of "local authority," he will see that the authority means the municipal council for the municipalities and, for the electoral areas, it's the board of the regional district. That definition will cover section 6.
C. Serwa: I have a few questions on this section. Downloading was brought up in this discussion. I think the expanded authority to the locals is warranted and will be appreciated. There are two aspects to downloading. One is the actual cost of the preparation and probably the maintenance of an emergency type of staff. That's one aspect, and, as the hon. minister alluded to, some grants are available.
The other aspect of downloading is financial assistance for disasters. Does a community stand alone when confronted with the increased costs, let's say, in the case of a flood or perhaps a forest fire in a northern community? Is the community now accepting that additional financial responsibility? That's another point.
The final point that I would like to make is about the assistance cost to residents who have suffered financial loss because of a disaster or emergency situation.
Hon. C. Gabelmann: The member may have asked more questions than I'm going to answer, because I may have been focusing on what I think is the major one, the downloading implications. There are no changes as a result of this legislation in respect of downloading. In fact, you might argue there's a benefit to local authorities, given that to date the provincial response has been limited to flood relief and we are now going beyond that ability. I think what would happen is that the kind of approach taken now in respect of flood relief would continue and cover an expanded area.
Nothing in the bill touches the question of downloading. There is no intent to change the way in which we operate. In fact, we would not have been able to receive the cooperation of local government to bring in this legislation if there had been any suggestion that this is a mechanism to off-load our costs. That is not what we're talking about.
C. Serwa: Again, for my clarification, disaster financial assistance to communities would be available to defer the cost of an expanded operation to carry out the plan. The financial assistance to residents would be carried out, as is done under the provincial emergency program. Is that correct?
Hon. C. Gabelmann: Currently incremental costs are covered for the flood relief situation. The incremental cost formula would continue.
[ Page 8968 ]
Sections 6 to 8 inclusive approved.
On section 9.
A. Warnke: Essentially, this is an opportunity to clarify one question that actually has come to my attention several times, and that concerns the procedure for declaring a state of emergency. In very quick terms, strangely enough one of the questions I've been hit with too is: where do elected officials fit in?
Hon. C. Gabelmann: Hopefully not causing the disasters.
If the member is asking whether elected officials have a role to play in declaring emergencies, then short of the minister responsible, the answer is no -- for members of this Legislature, at least.
Section 9 approved.
On section 10.
A. Warnke: Again, what I'm pursuing here a bit is a clarification. Which authority would be responsible for the costs incurred during a state of emergency? Would it be the provincial government, the local government or some combination of the two, where there's some sort of cost-sharing between them? If the cost is shared between the two governments, then how would the cost-sharing be determined?
Hon. C. Gabelmann: I tried to answer that question a few minutes ago in response to the member for Okanagan West. What we're basically looking at here is that incremental costs incurred by local government would be paid through the provincial emergency program funding, as is now the case in flood relief.
L. Fox: I think this section allows me to talk about something which has occurred time and time again in the rural communities and in the rural regional districts, where they have the Jaws of Life at their disposal, and because of an emergency they're called out. There has been a lot of controversy over the course of the last eight to ten years over whether those services should be paid for. The minister just suggested that the incremental costs would be paid for under PEP, but in fact that has not been exercised consistently throughout the province up till now. Is this new act now suggesting that services, such as the Jaws of Life, provided by a municipality into a regional area would now be considered a legitimate service in the case of an emergency, and PEP would pay that municipality or regional district for providing that service?
Hon. C. Gabelmann: The member raises questions which, were I on the opposition, I would be raising too, because those of us who represent rural constituencies know about this problem, and it continues to be a difficult one. However, Jaws of Life are almost always used after a traffic accident to get people out of a car that has collapsed around them. We don't declare a state of emergency, under this legislation, when we have a traffic accident.
The member is trying to raise a question on behalf of his constituents, which, I might say, I would raise on behalf of my own constituents. But it doesn't fit under this particular statute; it doesn't fit under this legislation. The volunteers in the municipalities who operate Jaws of Life are assisted by the emergency program in place, and nothing is going to change as a result of this legislation. However, the member makes a point which I fully understand, and there may be other places to have that discussion.
J. Weisgerber: My first question has to do specifically with section 10(1)(d), which gives the minister and the people designated -- obviously by the minister -- the right to acquire or use real or personal property in a manner which might be appropriate or is "considered necessary," according to the wording of the act. To start off, perhaps the minister could give me some sense of the safeguards that might be around. I believe that some of these sections of the bill have caused a fair amount of public concern. To simply say that you have the right to use real or personal property in a way you see fit doesn't.... Perhaps the minister, just to start off, could give me some sense of the constraints or boundaries that the power would be used within.
Hon. C. Gabelmann: As I mentioned in my concluding remarks in second reading, there are more safeguards in this bill than there are in the existing legislation. Those commentators who are concerned about abuse of power should be concerned about it prior to the proclamation of these changes and not after. I think the member is asking a legitimate question, however, to help the public debate about this issue.
In an emergency situation -- say, if somebody's bulldozer is needed to help prevent a creek from going in a certain direction or to help put a fire guard up if there is a fire as a result of an earthquake, or those kinds of situations -- the legislation is quite clear that it can only be for those kinds of purposes. It's also clear that compensation would be paid if compensation is appropriate, if the machinery is damaged or destroyed.
[5:45]
That's the kind of purpose that is envisioned here. Members from rural constituencies over the years are familiar with these issues in respect to forest fires, where similar authority has been necessary and has always been used wisely, and almost always with the full cooperation of the people in the community, who welcome this kind of initiative.
J. Weisgerber: I'm not dissatisfied at all with the answer. It seems to me that these are the kinds of powers that have been used in forest fire and flood situations. When we revisit a bill that hasn't been looked at for a number of years, the legislation does cause concern. People are deeply concerned about some of the powers that perhaps no one recognized existed.
Just before I get off subsection (l), I'm wondering about the idea of fixing prices, for rationed food,
[ Page 8969 ]
clothing, fuel and those kinds of items. I'm trying to envision the kind of event we might have in British Columbia that would see the minister deciding to fix prices for fuel or rationed food.
Hon. C. Gabelmann: The big example of this, of course, would be if we had a catastrophic earthquake that required an exercise of really unusual power. Hopefully, that won't happen in our lifetimes, or, for that matter, at any point. But a smaller example would be if a community like Squamish was blocked off from access as a result of some natural disaster -- floods, slides, or whatever -- and there was a limited amount of fuel available in the community. You may need all of the fuel that is available for dealing with the emergency itself. You also want to be able to make sure that there aren't people taking unfair advantage of that limited supply, and raising the price to an unreal and extortionate level. It is primarily designed for unusual circumstances, and I think it would be rarely applied. It would be applied if there was limited food available in a community that was cut off -- I think of a community in my riding, like Port Alice, which did have an event of this kind back in the early seventies -- and you couldn't get it in. These days we are probably going to be able to get it in with helicopters, or whatever. It is for that kind of a situation, in a really remote part of the province, so the local director who is running the disaster campaign can ensure that everybody gets their fair share of what food or fuel is available, and that kind of thing.
Sections 10 and 11 approved.
On section 12.
C. Serwa: I move the amendment standing in my name on the order paper.
The amendment to section 12 addresses a concern that I had addressed in an early suggestion for an amendment. The wording of this has been enhanced, in consultation with the minister, still following my intentions here of concern about vesting too much authority in one individual that would culminate in a great deal of pressure in an emergency situation. The amendment reads as follows:
[SECTION 12, is hereby amended by adding the following subsection:
(2.1) The head of a local authority must, before making a declaration under subsection (1), use best efforts to obtain the consent of the other members of the local authority to the declaration and must, as soon as practicable after making a declaration under subsection (1), convene a meeting of the local authority to assist in directing the response to the emergency.]
There is a great deal of authority vested in the local authority in this particular section. We hope this amendment enables greater responsibility and participation by more members of that local authority.
Hon. C. Gabelmann: The member made the point in second reading debate. I think he drew our attention to an important issue, on which I share the view of the member. I am happy to say that we accept the amendment as proposed by the member.
Amendment approved.
On section 12 as amended.
A. Warnke: This section indicates that the local authority may declare a local emergency without the authorization of the provincial government. However, there is a stipulation that the local authority must notify the provincial government. Section 12(4) indicates that the declaration of a local emergency is valid for seven days only, unlike the provincial declaration, which is 14 days. The ministry has indicated that the time period is different because local emergencies are often less widespread and are able to be controlled within a shorter period of time. However, the local authority, with the approval of the Lieutenant-Governor-in-Council, extends the period for seven additional days at a time. What I would like to have clarified is if this rotating renewal is due to cost considerations. That is, if an area is considered to be in the state of an emergency, will that be covered by government?
Hon. C. Gabelmann: No, the motivation here is that these are extraordinary powers that occur under a state of emergency. It's inappropriate to have those powers extend for too long a period without appropriate vetting. The seven-day provision is there for that reason.
Section 12 as amended approved.
On section 13.
A. Warnke: Section 13(6) indicates that the local authority of a municipality or electoral area may borrow any money necessary to pay expenses caused by the emergency. I am seeking some clarification here. What costs could the provincial government not cover in a state of local emergency that the local authority would need to borrow money for? Would the local authority be charged interest? How would the terms be determined? I will leave it at those two questions.
Hon. C. Gabelmann: There may be a situation where the local government needs to obtain some money in order to deal with the situation very quickly. They would be required to follow all the rules contained within the Municipal Act. We have discussed this section with Municipal Affairs, and we think the procedures are sufficient to safeguard the interests of the taxpayers.
L. Fox: I want to follow up on that point. I think I heard the minister right: that any moneys borrowed through the bylaw and ratified by the Minister of Municipal Affairs would be subject to the respective formulas. For instance, if a disaster caused an infrastructure problem where the water system had to be repaired in order to continue to provide water, by the municipality entering into this bylaw so that they
[ Page 8970 ]
can quickly repair the water system, does that automatically assume that it would be subject to the sharing of the infrastructure grants presently in place? Or would we look at circumstances beyond the normal sharing arrangements because it was a local emergency?
Hon. C. Gabelmann: What we're talking about in this section is the process that municipalities follow should they need to arrange for some immediate financing. In fact, the sharing grants under Municipal Affairs may not apply in this situation, because the flood or the natural disaster may apply, and the replacement costs will come out of provincial funding as opposed to a joint funding arrangement under revenue-sharing. Members should feel comfortable, I think, that this section deals only with the process to be followed, should there be a need to very quickly arrange financing to deal with a particular problem.
L. Fox: Just for final clarification, this is a process only for interim funding until such time as the local authority can access provincial funds, which would alleviate that local authority's debt load because of its actions through a local emergency declaration.
Hon. C. Gabelmann: This is to be able to deal with a situation where a local authority needed money immediately to repair or solve a particular problem. Following that, they would make their application to the emergency program funding authority for payment of whatever costs were incurred as a result of the disaster. We're not talking here about the revenue-sharing grants at all; we are talking simply about interim funding to get the municipality through a process, pending the application for payment from the emergency program.
You can imagine situations where some work may need to be done on the day of the disaster. But you know how the provincial government works: you aren't going to get a cheque that day from the emergency program fund to pay for it. You may need to go out and borrow some money or whatever. This will establish a process for local authorities to follow, that's all.
L. Fox: I just want to examine the process a bit. I'm trying to get it clear in my mind, because it requires a bylaw to be ratified by the Minister of Municipal Affairs, and that obviously is going to take a little time. If, on applying under subsection (6), the municipality drafts a quick bylaw and submits it to Municipal Affairs for its approval to borrow money on an interim basis to deal with the emergency.... Would there be some examination through your ministry at that point as to whether or not this is indeed a legitimate emergency? I can see, being a mayor somewhere, how I might be able to quickly generate some funding beyond the infrastructure grants. What process will there be to examine whether or not this is a legitimate request on behalf of a municipality?
Hon. C. Gabelmann: First of all, there has to be a declaration ordered. So the mayor whom the member is suggesting, who might want to access this process to pay for some other deeded work, would have to have declared an emergency. Secondly, if it is being abused in any way, the minister responsible would very quickly end the emergency. If an emergency is declared and then there is a joint effort between the local government and the emergency program, the emergency program looks after a lot of the infrastructure details in and around workers' compensation and all the payments that need to be made, just from a bureaucratic perspective.
If the member is asking me if a municipality would be able to do basic infrastructure construction by accessing this program, the answer is no. But the emergency program would pay for any damage that was caused if it met the criteria that are established, as they do now with the flood relief. So there is no difference, again, from what has existed under flood relief.
[6:00]
Just so everybody knows what is happening behind the scenes, with everybody's cooperation and agreement, we would like to adjourn for half an hour and come back at 6:30 to do some Ministry of Finance bills which were on the list. If we get those finished, I will be ready to continue again by 7:30 with this bill and the other one that was on the list. Everybody is nodding; I think we have an agreement on that.
I move the committee rise, report progress and ask leave to sit again.
Motion approved.
The House resumed; the Speaker in the chair.
The committee, having reported progress, was granted leave to sit agai.
Hon. C. Gabelmann: I move the House recess for 30 minutes.
Motion approved.
The House recessed at 6:01 p.m.
The House resumed at 6:35 p.m.
Hon. M. Sihota: I call committee on Bill 46.
TOBACCO TAX AMENDMENT ACT, 1993
The House in committee on Bill 46; D. Streifel in the chair.
Hon. G. Clark: First of all, I would like to introduce on my left, Glen Armstrong, and on my right, Simonne Decosse, both of whom are in the tax policy branch of the Ministry of Finance.
Section 1 approved.
On section 2.
[ Page 8971 ]
F. Gingell: As we see, section 2 is an amendment to section 2.1, and in section 2(c), (3.1) says: "A consumer who is an individual shall immediately, at the time of receiving tobacco...." This sounds as though it is a voluntary disclosure by the recipient of a package. At the time that he receives it, it may contain tobacco and he may not know what it is. Can the minister explain to us exactly the way in which this will happen?
Hon. G. Clark: Customs officers routinely open packages in the mail. If there is tobacco in it, they don't give you the package unless you pay the tax. That is consistent with other tax statutes as well.
F. Gingell: I get packages sent from overseas that haven't necessarily been opened by customs. They may or may not have a little customs declaration form on them. Can you...?
Hon. G. Clark: That's correct. I also get packages from overseas, and I know my colleague the Minister of Municipal Affairs probably does as well. Canada Post and customs officers do not open every single package shipped from overseas; it's a random selection of packages. They have dogs sniffing. They wouldn't be doing that for tobacco, but they do it for drugs or other contraband. So it's a random selection, which they have been doing for years. All we're really doing is adding to the list of things that they will review when they open a package to include tobacco as one option. We are not after someone who's sending a pack of smokes from England to British Columbia. This deals with any potential illegal or smuggling activity with respect to large-scale volumes of tobacco that might come in through the post.
F. Gingell: So in the normal set of circumstances, if a Canadian citizen or a resident of British Columbia were to receive a package that turned out to contain tobacco products, they have a moral responsibility to go and make a declaration. Who would they make that to? Does the government intend to publish any information that would indicate to people that they do have a responsibility to go to a specific place and pay the tax?
Hon. G. Clark: The answer is really no. One could probably make a better argument. It's the same as cross-border shopping. If someone goes to Bellingham and buys a television, they have a moral obligation to voluntarily remit tax to British Columbia; it's a sale to a resident of B.C. We don't, of course, have an ad campaign saying: "Here's where you should voluntarily come and pay your sales tax"; and we certainly wouldn't have one with tobacco. The member may want to make that case, and I could take it under advisement, but the government has no intention of doing that at this time.
I just want to make it clear that I'm advised that there are American companies -- in fact, there's one right here, the International Tobacco Club, Brookwood Place, Fort Collins, Colorado -- which form specifically for the purposes of mailing in large volumes of tobacco into the country to escape tax. So we keep putting them out of business through current legislation. This makes it very simple. In other words, currently they would argue and my staff would, I guess, agree that there's a bit of a loophole for postal smuggling. So we have kept on top of this problem through a variety of techniques, which has been very challenging. This makes it very clear that it's not acceptable to smuggle or import cigarettes or tobacco by post, where there's no tax paid. That's the problem we're trying to deal with. As I said, we're not trying to deal with someone getting a pack of smokes in the mail from overseas, which may happen from time to time.
Sections 2 and 3 approved.
On section 4.
F. Gingell: As I have said in second reading, one expects legislation to contain fines of relatively small sums. Inflation certainly has taken place here; they're going to get you. I wonder if you'd like to talk about the process you used to arrive at what an appropriate level of fines is in relation to smuggling issues.
Secondly -- I'm asking this question out of ignorance -- you have the ability for penal punishment. I wonder how this ties in to the rights of the provinces and the federal government. Could you deal with that briefly?
Hon. G. Clark: I'm not actually sure of the latter point. But let me make the general point regarding penalties. What's happened, really -- and the formula we actually use is not really a formula -- is that as the tax on tobacco products has been increased dramatically in the last decade, regardless of party or province, the actual monetary gain from smuggling has increased dramatically. Now that the tax burden on cigarettes is so high, it makes it a lucrative proposition to engage in smuggling or otherwise illegal sales of tax-free tobacco.
[6:45]
The penalties of the day correspond with the tax benefit that would accrue to someone who engaged in that activity. So it's not a question of the penalties keeping pace with inflation, but with the monetary gain that would accrue to someone who engaged in that illegal activity. That's why there has been this fairly dramatic increase. Obviously, if one can make $20,000 or $50,000 smuggling tobacco, a $200 fine would hardly a be a deterrent. That is why there is this large increase. I am advised that it is high; it is the third-highest in the country. Ontario's and Nova Scotia's penalties are higher.
In addition, I want to make sure that members of the committee know that this is permissive. The fine, in other words, ranges from $2,500 to $25,000, and it will be up to the courts to decide the appropriate penalty. They would review the attempted benefit from the illegal activity, and then set the fine accordingly. That would not be a role for the government or the tax policy branch or the like; we are providing a range to the courts. It is a very tough range, but I think it is in keeping with trying to police this, and to give the courts
[ Page 8972 ]
the latitude to set fines that are commensurate with the profitability, if you will, of that illegal activity.
F. Gingell: Section 28(3) provides that it takes more than five cartons of cigarettes to make a presumption of guilt, and that subsequently has to be proved. I presume you are saying that if you have smuggled less than five cartons, we are not going to worry about it; if you have smuggled between six and 150 cartons, we are going to take away the tobacco, make you pay the tax that would have otherwise have been paid, but that is it. In effect, you have lost the retail value of the cigarettes that you have smuggled. To me, 150 cartons, to me, sounds like quite a lot. If somebody has 150 cartons it is not for their personal use, that is for sure. Once you go over 150 cartons, the assumption is that you are in it in a major commercial fashion. Have terms of imprisonment been provided for tobacco smuggling in the past?
Hon. G. Clark: If the question is whether anyone ever gone to jail, the answer is no; in British Columbia, the answer is no. They have in Ontario and, I believe, in Nova Scotia. You are correct in assuming that this is a new provision, although it's in keeping with other fairly recent legislation in Ontario and Nova Scotia.
I apologize. I inadvertently misled the committee. I have just been advised that we have always had imprisonment in the act as an option. Three months, or a fine and imprisonment, has been an option for the courts in the act. It's been in for some time, so this is not unique; it's an extension of the existing act.
F. Gingell: What was the imprisonment period before? Was it two years, or has it been increased?
Hon. G. Clark: It has increased. For a smaller conviction, it could not be more than three months. For a larger problem, it was not less than three months and not more than six months.
F. Gingell: Do I understand that, for 150 cartons or less, the ability was not more than three months previously -- but you have taken the penal portion out?
Hon. G. Clark: The offence provision in the Tobacco Tax Act allows for imprisonment, but it's more to do with other contraventions of the Tobacco Tax Act. As I understand it, we are making it specific to the question of smuggling. We are extending the imprisonment option for the courts. Frankly, when you get into the six-month provision, you are into activities related to organized crime. We're talking about large-scale volumes and huge, lucrative profits in that activity. That's why the imprisonment here is really a get-tough-on-crime kind of initiative that gives the courts the opportunity, particularly in the case of large-scale smuggling activities, to impose fairly substantial imprisonment penalties.
F. Gingell: I appreciate that I really shouldn't be asking questions just to educate myself and perhaps the minister is not the right person to ask, but is the province limited to being able to give prison terms of not greater than two years? I know we have provincial prisons that deal with sentences of two years and less and federal ones that deal with two years or more. Is that the case?
Hon. G. Clark: That's correct.
F. Gingell: When you get to subsection (2.5), it says: "For the purpose of subsection (2.4), if one of 2 or more persons, with the knowledge and acquiescence of the rest, has tobacco in the person's possession, it is, in the absence of evidence to the contrary, considered to be in the possession of each and all of them." So if four people were involved in a situation that came to the attention of the people administering this, and 500 cartons were involved, would you divide the 500 cartons by four -- because there were four individuals -- and then they would come under 150 cartons? Or would they all be deemed to have over 150 cartons and subject to much greater penalties?
Hon. G. Clark: That's a decision for the prosecutor and, of course, ultimately the courts to determine. I'm advised that this clause is a standard accomplice clause, which exists in other acts, and has been reviewed -- as you can imagine -- by our criminal justice branch and the Attorney General's ministry. It suggests that this is permissive of the courts to allow them to extend the penalty provisions with respect to those who are accomplices in the activity of a crime. It's not unique; it parallels other legislation.
Section 4 approved.
On section 5.
J. Weisgerber: I suppose this is the first section of this act that I seriously take exception to. The smuggling of tobacco is a serious matter, and I recognize there is greater temptation now with the price of cigarettes and the tax on them. But to move to this fundamental change from the premise of innocent until proven guilty and to require someone to prove that they are in fact innocent or they will be assumed to be guilty simply goes much too far, given the issue that we're dealing with. I am very curious to hear some rationale that would convince me to support this kind of legislation.
Hon. G. Clark: If the member thinks this is tough, consider Manitoba, where the limit is two cartons.
Interjection.
Hon. G. Clark: That's a Conservative administration.
I was somewhat incorrect when summing up in second reading debate, so I want to clarify the record here. There is a current provision that if you have more than five cartons of unmarked cigarettes.... The current five-carton rule only applies to native Indians,
[ Page 8973 ]
and that has been in the act for some time. This extends that five-carton rule to the broader population.
I want to be clear here. This is for the purposes of a police officer, not for the tobacco tax collectors, tax auditors or anybody else. This is for police officers when they come across an individual they feel is suspicious. If there are more than five cartons, this gives the police officer a remedy: seek a search warrant or take action, such as seizing the tobacco.
Again, every province in Canada has similar seizure provisions. In Manitoba it is two cartons. In British Columbia we propose five cartons. In the other provinces there is no limit. In other words, it could be one, two, three or four cartons in any other province, and the police would have the power to take action -- obviously, under the enormous restrictions that are on the police today. What we've done here is not out of step with other provinces. In fact, one could argue that the limit of five is slightly more generous than some other jurisdictions that have no number in their legislation. I'm not sure that's completely correct or fair, but you could certainly make that argument.
The police need the power to enforce the law against tobacco smuggling. I'm advised by my staff that the police feel a certain amount of frustration in enforcing the tax payment and tobacco-smuggling laws, because we haven't got the kinds of seizure powers that exist in other statutes. If I came to this House and suggested to members that they support the kinds of seizure clauses that exist in other jurisdictions where there are no numbers, frankly, I think we might be vulnerable to the attack from members opposite that it's unfair and gives too much power to the police. Manitoba has two, and other provinces have nothing. We already had five for the native population, so we extended the five cartons to the broader population only in order to give the police the power that in fact they need to enforce this new regime.
J. Weisgerber: Section 5 does not talk about seizures; it talks about prosecution. Indeed, in the explanatory note, it says that there is a presumption that the possession of more than five cartons of cigarettes is for an unlawful purpose. My concern with this is not around the ability of a law enforcement officer to seize tobacco because they may feel there is some question about its origin. But this section suggests that the individual, or group of individuals, or family who find themselves in the possession of five or more cartons of cigarettes could in fact be prosecuted, and that there would be the obligation under this section of the act for them to prove that they lawfully obtained the cigarettes, rather than the normal practice under the law of there being a requirement of the prosecutor to prove that they were illegally obtained.
[7:00]
Hon. G. Clark: That is not correct, and I can't say it any stronger. You are innocent until proven guilty. If there is evidence that you are breaking the law, this establishes prima facie evidence upon which the police can take further action. This does not establish that you are breaking the law; it establishes that the police can take further action. If you have a good excuse for having six cartons of cigarettes in your car, then the police may or may not choose to exercise their prerogative to pursue the allegation further. I am advised that this is to give the police the power to take further action. It does not mean that you are guilty because you have six cartons. I am advised -- and this is a very serious problem -- that if you have 25 cartons of cigarettes in your car and the police stop you, it is very difficult for them to pursue that any further. They are saying to government: "We can't enforce the legislation today. We catch people we think are smuggling tobacco, but we cannot take appropriate further action." This is to allow the police to take further action. In a court of law it gives the prosecutor prima facie evidence that you may be breaking the law. But that does not mean that you are guilty or that you will be found guilty; that allows the prosecutor the right to proceed further. I want to make it clear that this is not inconsistent with anything else that we have in terms of tax policies. It is giving more power to the police, if you will, and clearer rules which they have to follow in order to take further action.
J. Weisgerber: I am going to take few minutes with this, because as comforting as the minister's words may be, nothing in this section is consistent with that. The section talks about prosecution. The explanatory notes talk about the presumption that possession is an unlawful one. I see nothing in here to deal with seizing goods or laying charges. I would expect that those would be within the jurisdiction of the police or the customs agents, in any event. I would be much happier with a section that dealt with seizure rather than prosecution, but perhaps the minister can explain the use of the word "prosecution" in section 5, which amends section 28 of the Tobacco Tax Act and deals specifically with prosecution.
Hon. G. Clark: For the attention of the committee, the new section 28(3) says: "In a prosecution under section 27(2.4) and for the purposes of sections 34 and 35" -- sections 34 and 35 are the seizure sections of the act -- "the possession or keeping of tobacco in excess of 5 cartons by a person other than a dealer is" -- and this is important -- "in the absence of evidence to the contrary, prima facie evidence that the person unlawfully possesses or keeps tobacco for an unlawful purpose."
If a police officer stops someone, they currently have the power of seizure, but they can't exercise that. This section says that if they have five cartons and they don't have any evidence to the contrary, the police officer has the option of taking further action, meaning seizure, and the prosecution can use this section as part of their case.
If three people are going fishing and they have six cartons of cigarettes, and they say to the police officer, "Well, the three of us are going fishing for a couple of weeks, and that's why we have six cartons," that is clearly not evidence. That is not sufficient grounds for the police to take action. That's why this is here. This is simply a clause that gives the police the power, in the absence of evidence to the contrary, to take action. It
[ Page 8974 ]
obviously also gives the prosecution the power in a prima facie evidence situation to lay charges should the prosecution, in conjunction with the police, decide to do so.
J. Weisgerber: Perhaps I can try one more time. Perhaps the minister could explain prosecution under section 27(2.4) of the Tobacco Tax Act, and the circumstance that would lead up to that prosecution. It seems to me that there is a reason that the word "prosecution" is so predominant in this section.
Hon. G. Clark: It's quite clear that section 28(3) says: "In a prosecution...and...." It doesn't say "or," it says "...and for the purposes of sections 34 and 35..." -- which is seizure. There are two separate things here in this section: one is prosecution and one is seizure. In other words, one is prosecution and one is police action, if you will. Prosecution, under section 27(2.4) of the Tobacco Tax Act, is after a charge is laid by the prosecutor. The first thing they have to have is a prima facie case against an individual. Five or more cartons establishes a prima facie case, and if the police recommend after their investigation that charges be laid, the prosecution may choose to do so. If they choose to do so, then they will be making the case in court that the individual is guilty, and one of the elements they will use in their case is that the individual had more than five cartons in their car.
R. Neufeld: Just to take that a little further, and maybe the minister is not sure.... I'm not sure if it falls under his purview or not, but let's change that from cartons of cigarettes to cases of liquor. Is there a certain number of cases of liquor that one can carry around in one's car and not be charged? Or does it just refer to tobacco products?
Hon. G. Clark: I'm sorry, I don't know the answer to that. It isn't my area, but I don't mind finding it out for the member.
R. Neufeld: Just for comparison purposes, it would be interesting if it is there or not, and whether it should be.
Sections 5 to 7 inclusive approved.
On section 8.
F. Gingell: Just as a matter of information, I went through all the various sections, and saw what happens. This talks about the proceeds of the tax imposed under this act, and the proceeds of any forfeiture. I would like to deal with the forfeiture later when we get to section 40, but I don't understand why this is there. This makes sure that the proceeds of the tax imposed under this act are paid into the consolidated revenue fund. If we go back to a section we dealt with earlier, it talked about a fine that is equal to the tax. If it is an amount that is levied and received under section 27(2.4)(a)(ii), (b)(ii) and (c)(ii), do they have a different attribution? They are fines, not taxes, aren't they? I am a little confused as to why this is needed. Fines are paid into the consolidated revenue fund, aren't they? Taxes are paid into the....
Hon. G. Clark: I am a bit confused, as well, by the member's questions, but let me try to explain it. Where tobacco is forfeited to the Crown -- in other words, where it is seized and found to be in contravention of the act -- any proceeds from the sale of that tobacco back into the wholesale market go into the consolidated revenue fund. I guess the question is: where else would it go? It is illegally brought in; it is sort of proceeds of crime, if you will. Hopefully, it won't be very much, because we are trying to stop smuggling, not profit from it. The tax paid would have gone to the government anyway. This is simply saying that when the tobacco which is seized is sold back into the wholesale market for sale, the Crown receives the revenue. I don't know where else it would go.
F. Gingell: If section 32 had only said "the proceeds of any forfeiture," I wouldn't have had to get up on my feet, but it says: "The proceeds of tax imposed under this Act...." There always has been tax under this act, and it has always been paid into the consolidated revenue fund. Changes before this don't talk about taxes; they talk about fines that are equivalent to the amount of the taxes. Or is this in here purely and simply because the old section 32 said that this tax would be paid into the consolidated revenue fund? You or whoever was responsible before forgot to include other forms of revenue -- the proceeds from forfeited property -- so you have now brought that in, not because you have changed the act but because it was forgotten before. Is that correct?
Hon. G. Clark: I guess the real answer is there was no forfeiture before, or there wasn't very much of it. That was part of the problem in terms of trying to deal with the smuggling question. The member is correct, though, that they already had proceeds of tax, which go to the consolidated revenue fund. That is a normal section. We have added that now because we have these other sections which contemplate forfeiture upon seizure. We have now added that as a source of revenue.
F. Gingell: If you now read the act as it will be amended, there will be three forms of revenue: tax in the normal course of events, the proceeds from the disposal of forfeited property, and fines. Is there not a need to include that fines levied under this act would also be paid into the consolidated revenue fund?
Hon. G. Clark: The answer to that is that any fines on any of our tax statutes are levied by the courts, and they go into the consolidated revenue fund via that vehicle. So it wasn't required to duplicate that in this section.
Section 8 approved.
On section 9, section 34.
[ Page 8975 ]
J. Weisgerber: This follows a bit the concerns that I had with section 28. I'm particularly interested in 34(b). To back up to 34(a), I'm not sure whether just reasonable suspicions are good enough grounds even to stop a vehicle or an aircraft, which seems to go a little bit far in the search for tobacco. But to enter a place or premises, except a residence, without a search warrant, when section 35 allows for the issuance of a warrant without any hard evidence.... I would be particularly concerned -- although I'm concerned with the whole of section 34 -- with the fact that there's no requirement for a search warrant under 34(b), given the fact that section 35 makes a search warrant so easily available.
Hon. G. Clark: I must tell the committee I agree with the member's concerns. What we found in the ministry generally, initially anyway, is that the criminal justice branch advises us that this is consistent with every other statute. The police say that you need a search warrant only for your residence -- or place of business, in some cases. But by the time you get a search warrant for a vehicle, a vessel or an aircraft, it's gone. This is exactly consistent with all of the other powers granted to the police to deal with these kinds of questions. I want to make it absolutely clear here that where there are reasonable and probable grounds that tobacco is unlawfully possessed, a peace officer may enter in search of tobacco in other than a residence, or can stop and search a vehicle, vessel or aircraft. The test is an onerous one. It's one the police grapple with every day in the course of their duties. Frankly, if you're going to pass a tobacco tax and then give power to the police to enforce it, you have to parallel their power in other statutes. That's why this is here. I share the member's concerns about this sort of civil liberty question, and I want to give him any assurance I can that this is not a new power given to the police that they don't already have; it simply allows them to deal with the tobacco smuggling.
J. Weisgerber: I would assume that to be the case -- that the reason for it would be to deal with tobacco smuggling. I also recognize that a residence is exempt from this intrusion or power to search without a warrant. But I think that the argument the minister makes in (a), that a vehicle, vessel or aircraft can move away quickly, just doesn't follow to the next section. It seems to me that by the time a police force or officer gets around to determining that there are reasonable and probable grounds, it's not an unreasonable step beyond that, in a premises other than a residence, to simply get a search warrant and follow that.
[7:15]
I know there's always a balance here. We're always trying to protect individual rights against the ability to effectively enforce the law. But I'm not hearing anything yet that convinces me there's a situation, with regard to a premises other than a residence, that would warrant this kind of power.
Hon. G. Clark: I think the answer is, first, that the reason you need a warrant for your residence -- a fairly recent reason -- is the Charter of Rights and Freedoms, which essentially requires a warrant to search a residence. There is no such requirement under the Charter for other property.
But the real problem is that this is contraband, and if the police go through the process of getting a warrant on a warehouse, by the time they get the warrant the property could be moved. So this is giving the police the power to enter and try to deal with it.
I want to make it clear to the committee that if the police burst into someone's place of business without reasonable and probable grounds, then in all likelihood they will be facing court action or be sued by the individual. That happens from time to time. So the police don't take these powers lightly -- as I think all members agree. The police are very careful in terms of exercising the powers granted to them under legislation like this. But it doesn't make any sense to have legislation like this and then not give the police the power to take action that they have in other statutes.
F. Gingell: Is this the section that ties in the rights of a customs officer to search a vehicle coming through the border, which would then allow you to act under this act rather than some other act?
Hon. G. Clark: The answer is no.
Section 9, sections 34 to 36 inclusive approved.
On section 9, section 37.
F. Gingell: Originally, on my way through, I was concerned about the length of time involved, because -- this is for tobacco products that turn out not to have been illegally held and are therefore returned -- I seem to remember that in the act there is an ability to have three months and then get further three-month extensions until you get up to one year. I take it that the only way you can really avoid this problem is for the person from whom the property has been seized to put up cash deposits equivalent to the value of the tobacco and the taxes, under section 40(2)(a).
Interjection.
F. Gingell: Yes, we're dealing with section 37. The issue is that tobacco products -- cigarettes particularly -- get stale reasonably quickly. I believe there is, under section 39, an ability to hold the tobacco for as long as one year in three-month intervals. If you're the person whose property has been seized under section 37, the only way you can protect it from getting stale is to put up cash in the amount of the tax and the value of the tobacco, or some other form of security. Would you confirm that?
Hon. G. Clark: That's correct. We're getting into hypotheticals, but if the action was taken by the police and subsequently found one year later to be incorrect, then the Crown is not liable for loss or damage arising from that action. That, again, is consistent with other practices. I appreciate that that's a problem, but the only way around that is to have the individual put forward a
[ Page 8976 ]
cash equivalent, in order to make the Crown whole, if you will, in the course of the investigation.
Section 9, sections 37 to 39 inclusive approved.
On section 9, section 40.
F. Gingell: I wonder if the minister could explain to us very briefly exactly how the disposition of forfeited tobacco products takes place now.
Hon. G. Clark: There are no forfeiture provisions now, as we talked about earlier, so we'll have to establish a new practice. But I'm advised that the practice will be to sell it back to the wholesaler for redistribution.
Section 9, sections 40 to 42 inclusive approved.
On section 9, section 43.
J. Weisgerber: I'd just like some clarification on tobacco stamps. As I understand it, tobacco sold in Canada has to be stamped with either a stamp that indicates tax paid or a stamp that indicates tax not paid. Any tobacco that's found in Canada with neither of those stamps is assumed to have been bought outside Canada and perhaps illegally.
Hon. G. Clark: Again, that may have come from some of the remarks I made. I want to make that clear. We now have the marking. On a package of cigarettes, the marking will be a green tearstrip with the following words: "Canada duty paid/droit acquitt�" -- in French, in other words -- and "British Columbia/ Colombie-Britannique." And on a carton and case the marking will be the English and French abbreviation for this province -- B.C./C.-B. -- enclosed in a black rectangle. So if you can picture it, on each end of the carton there will be a black rectangle with "B.C./C.-B.," and on each carton will be the green tearstrip with the words "Canada duty paid, British Columbia" in French and English. It doesn't actually say tax paid; they have those markings. They have to have those markings in order to be sold in the retail market.
Just for the sake of illustration, if a tax inspector or auditor goes to a retail store -- London Drugs or a corner grocery store -- they will clearly see on the ends of all the cartons this black rectangle with those marks. On an Indian reserve, for example, they wouldn't see that, and that would be appropriate for the purpose of sale to native Indians. But it would restrict the sale to those for whom the tax exemption is intended.
J. Weisgerber: Just to clarify, there is actually one less option than I had originally thought. There is either a duty-paid stamp, which is indicated on the cartons and on the cigarettes, or the absence of a stamp or sticker could mean either that the cigarettes were bought in Canada by an aboriginal community or by someone in an aboriginal community or on a reserve who is entitled to sell cigarettes without markings, or that they could have been bought outside the country -- and there would be no way to distinguish between cigarettes sold within Canada to an aboriginal band and cigarettes brought in from outside the province. Let me put it another way. If we go back to sections 28 and 34, if someone goes and buys five or ten cartons at a band retail outlet, they would get cigarettes that weren't marked. There would be no prima facie evidence of whether the cigarettes they had in their home or freezer were bought legally at a reserve outlet or smuggled in from the United States.
Hon. G. Clark: If they are cigarettes smuggled in from the United States, they won't have the "Canada duty paid" tearstrip on them. So the difference is, essentially, the addition of the marking "B.C./C.-B." on the ends of the cartons. Aboriginal people, who can purchase cigarettes tax exempt, will still be able to do that, and they will have "Canada duty paid" on their cigarettes. So if the member is saying, "Can I, as a non-aboriginal person, go on reserve and buy those cigarettes if I tell the shopkeeper that I'm an aboriginal person?" the answer is yes. That is, of course, the problem we're trying to come to grips with. In other words, we're not going to be able to absolutely police this. If I go and buy ten cartons of cigarettes on a reserve and then drive away and I'm stopped by the police, they would ask me, as a non-aboriginal person, how I managed to procure these cigarettes. That's where the provisions apply for police officers to take the appropriate action if they choose to do so. But that's essentially, I think, the procedure that we're trying to set up to try to deal with it. Aboriginal people have the right to buy tax-exempt, and the point is to try to limit the tax exemptions of the people who have that right.
J. Weisgerber: Not having smoked for a while, I've got to get these stamps clear in my mind. Individual cigarette packages sold either in Canada with the duty paid by a retailer who is paying tax or by an aboriginal band that is tax-exempt will have a green identification strip on each package of cigarettes, but the carton of cigarettes will not contain the same markings if it's bought on reserve. Is that accurate?
[7:30]
Hon. G. Clark: I'm sorry, I was trying to get it clear in my mind. I'm not sure I'm answering the question the member just asked, but essentially, the current mark, which says "Canada duty paid" in English and French, will continue to be the case for aboriginal people on reserve. What we are adding are two things: one, "British Columbia" is going to be added in English and French, and in green. On reserve they will have a clear mark or strip, which is consistent with what is there today, and it will say "Canada duty paid," because in fact the duty is paid for the purposes of aboriginal sale. So essentially what we are doing is adding the words "British Columbia" in English and French. We are changing the colour to green on each cigarette off reserve, and we are adding the black rectangle at each end of the carton. On reserve, there will still be a current.... What I gather, because I am not a smoker -- some of my staff are, and the good doctor
[ Page 8977 ]
here.... Perhaps we could get other members to participate in the debate. I gather the current tag that exists on all cigarettes will continue to be the case on reserve.
J. Weisgerber: From this information it is possible for an enforcement officer to identify cigarettes bought in Canada, cigarettes bought in Canada on reserve and cigarettes brought in from outside Canada. It's an offence for a non-aboriginal person to buy cigarettes on reserve and take them off reserve. All of the penalties that apply in section 27 would apply to a non-aboriginal person in possession of cigarettes marked to indicate they were bought on reserve and taken off reserve.
Hon. G. Clark: Yes, that is essentially correct. The only slight difference is that it's not illegal for a non-aboriginal person to buy cigarettes on reserve, but they have to buy tax-paid cigarettes on reserve, which native Indian stores certainly can provide.
J. Weisgerber: To clarify, then, the cigarettes which are marked with a clear strip rather than a green strip can't be taken off reserve, and all of the penalties apply.
In reading this amendment, I was curious about the fact that there is no reference at all to aboriginal sales. I thought it somewhat unusual, given the importance of that issue and the concerns around it, that the government would bring in a bill with a fairly substantial tobacco tax amendment without any such reference at all. As a matter of fact, I will probably pursue a couple of further questions on that. Under this section, can the minister tell me whether there is any obligation on aboriginal retailers to ask a purchaser whether they are aboriginal, whether they intend to consume the cigarettes on reserve, or to clarify their intended use?
The third thing I was going to ask is: is there an obligation on an aboriginal retailer to make a non-aboriginal purchaser aware of the law as it relates to going on reserve and buying them? As I travel around British Columbia, I quite often see cigarettes advertised for sale. The advertising material is clearly intended for the traffic passing by the reserve store. The advertising is clearly intended to bring the customer in; the prices are attractive. Is there any obligation on the retailer -- who has special consideration under the Tobacco Tax Act -- to acquaint the buyer with the regulations as they apply to non-aboriginal purchasers on reserve?
Hon. G. Clark: The answer is no. There is no obligation to inform people of that, but there is a law saying they are not allowed to sell on reserve to non-aboriginal people. That's the requirement of the law, and retailers know that. If we catch aboriginal people selling tax-exempt cigarettes to non-aboriginal people on reserve, we can pull their retail sales tax licence or their tobacco tax licence -- and we do regularly, I might say.
F. Gingell: Will these special markings be put on by the tobacco manufacturer or by the wholesaler? Have you got the agreement of the manufacturers that they will do it? As I understand it, you'll have different rules in Alberta from those in British Columbia -- for a product that's manufactured in one place in Canada for the whole of the market.
Hon. G. Clark: We are in discussions right now with the manufacturers. It will be done at the manufacturing end, not by the wholesaler. It is done in other provinces. They have been very cooperative with us; they understand there is a problem with tobacco smuggling. They have been very supportive of government's attempt to deal with it, so there shouldn't be any problem.
Section 9, section 43 approved.
On section 9, section 44.
J. Weisgerber: In this section, it says: "...a dealer or a common carrier under contract to a dealer." How does the aboriginal retailer fit into that? Are they licensed as a dealer? Are they considered in the same description? Is there no distinction between the two?
Hon. G. Clark: There is a distinction. They have an exempt sale retail permit, which is a special permit that applies to people who qualify for aboriginal sales. So it's a different category of permit, and this applies to them as well.
J. Weisgerber: That was my question. For the purposes of this act, they would be considered a dealer.
Section 9, section 44 approved.
Title approved.
Hon. G. Clark: I move the committee rise and report the bill complete without amendment.
Motion approved.
The House resumed; the Speaker in the chair.
Bill 46, Tobacco Tax Amendment Act, 1993, reported complete without amendment, read a third time and passed.
Hon. M. Sihota: I call committee stage on Bill 38.
EMERGENCY PROGRAM ACT
(continued)
The House in committee on Bill 38; D. Streifel in the chair.
On section 13 (continued).
A. Cowie: I have a question related to section 13(6) where it states that the municipality may borrow the necessary money to pay the expenses caused by the emergency.
[ Page 8978 ]
Interjection.
A. Cowie: No, we discussed that under another section, not expenses caused by the emergency. We discussed that under an emergency taking place, when the money was needed immediately. This is for money afterwards due to the damage. That's the way I read it. Is that not correct? I'm not talking about the money needed right away. I'm talking about the money needed afterwards to pay for the damage. Am I not reading that correctly? It says: "...expenses caused by the emergency."
Hon. C. Gabelmann: No, this section has nothing whatsoever to do with the moneys that might be paid out by the emergency program with respect to damages that were caused, similar to the moneys that are now paid out on flood relief. This section does not include that at all.
Sections 13 to 15 inclusive approved.
On section 16.
A. Warnke: A very quick question. Section 16 allows the minister to draw from the consolidated revenue fund to pay for any expenditures for a provincial emergency plan which the minister considers necessary. The key here is that the minister may pay for expenses to implement provincial emergency plans, but it does not stipulate local emergency plans. I would just like to have some clarification here about measures for local and provincial emergency plans under section 16.
[J. Beattie in the chair.]
Hon. C. Gabelmann: This is simply a section enabling the moneys to be spent without a particular appropriation in the event -- as it says here -- of a need "to implement a Provincial emergency plan or Provincial emergency measure." What it does further is ensure that the remediation -- in other words, the disaster financial assistance -- is not paid out of the consolidated revenue fund. That is a statutory obligation under a different section of the act, if I understand the construction here.
Sections 16 to 18 inclusive approved.
On section 19.
A. Warnke: As I interpret this section, it is similar to the current section 4, which stipulates that compensation will be determined by the Expropriation Compensation Board. The new section stipulates that a determination will be made in accordance with the regulations. As I see it, this requires some clarification as to why the change was made. I'll put it in the context of a question: is there not a danger that political interference might somehow interfere with the level of compensation here?
Hon. C. Gabelmann: The scheme proposed here is to establish by regulation the policies by which compensation pay-outs would be determined, and if a dispute existed following the application of that policy, then the resolution would be under the Commercial Arbitration Act.
[7:45]
J. Weisgerber: I believe this would be the section that would deal with compensation for property, perhaps municipal property damaged by the disaster itself. If that's the case, I would like to pursue a line of questioning. If not, I'm sure someone will let me know that's not the case. The reason I want to raise some questions today is my experience with the previous program. Perhaps I'll pause and let the minister respond.
Hon. C. Gabelmann: Just so we're all talking about the same thing, we were talking late this afternoon, earlier in this debate, about acquiring equipment such as bulldozers or whatever. This is the compensation for that kind of use, rather than land or something else.
Sections 19 and 20 approved.
On section 21.
Hon. C. Gabelmann: I move the amendment standing in my name on the order paper.
[SECTION 21, in the proposed subsection (1) by deleting "30" and substituting "60".]
If I may comment just briefly, in second reading there were suggestions that the 30-day time limit was a bit onerous, and we have responded to that by making the amendment, which will change it to 60 days.
On the amendment.
A. Warnke: It was a matter that was raised in second reading, and if I may say so, I would certainly like to compliment the minister on the change.
J. Weisgerber: I am struggling to find the place to talk about compensation for the damage covered by the event itself.
Let me also join in commending the minister for making both of the amendments that were suggested during second reading. It makes this process a lot more meaningful when legitimate points are raised and the government responds with the amendments. It's unfortunate that more aren't dealt with that way.
Again, I'm looking for the place to discuss compensation for the losses themselves.
Hon. C. Gabelmann: My suggestion would be that we deal with the amendment and then allow that discussion in section 21. As we look at it, it probably would have been better in 20, but the member had indicated he wanted to talk about that, and I think we should do it. We should accommodate it in section 21, and if we stray back into 20, that's fine by me.
[ Page 8979 ]
Amendment approved.
On section 21 as amended.
J. Weisgerber: The first issue I would like to raise comes from considerable experience I had with the previous provincial emergency program related to flood damage, so I'll talk in those terms and assume that any discussions we have would have application on the broader basis. There are several examples that I'm aware of where the compensation was limited to rebuilding the facility -- and I'm talking particularly about municipal infrastructure, but also private -- to the level of quality it was at before the event took place. I have seen examples where a road will wash out every two or three years. Every two or three years the provincial emergency program will come along and provide assistance to build the road back to the same elevation. Both the owner of the road and the provincial emergency program will agree that if the road were rebuilt to an elevation two feet higher, it would probably never wash out again. But the stalemate continues. And from time to time I find myself embroiled in this controversy, whaich says: "If the province had any sense, they would provide enough compensation to allow us to repair the infrastructure in a way that it wouldn't sustain this damage again in the future." The argument from the program in the past has been: "That's not our responsibility." Is there any opportunity, now that we're in the midst of a major overhaul of the legislation, for some compromise on those kinds of situations?
Hon. C. Gabelmann: The member has gone back to Hansard from the session after the Sayward flood and the flood on the Oyster River. I made that particular proposal in the House to the former government, suggesting that it's sometimes bizarre when we replace things back to the standard they were before, knowing full well we're going to have another problem down the road.
The emergency program's relief is designed to deal with replacement, not to replace programs that are properly in the Ministry of Environment or elsewhere. It's one of the realities of the day.
This legislation doesn't change that particular situation. There are times when common sense is so common that some corners may be cut to try to enable a better resolution of a particular problem. I've been through the issue a number of times in my constituency. Essentially, the issue comes down to the regional government -- it's usually regional, not a municipality -- in concert with the taxpayers in the local area, making a decision to levy some additional tax to build up the riprap, the road or whatever else. This program isn't designed to deal with the issue the member raises.
I have to say this, and the government hasn't dealt with this issue: it would make a lot of sense to find ways of ensuring that we could do more preventive work, so that we avoid having to use the statutory appropriation here to repair all the time. That happens. There's a lot of working with local government, and initiatives are taken to try to prevent problems. But it's not a perfect world yet.
J. Weisgerber: Actually, I wasn't reading Hansard. I was referring to experience in my own constituency, which would only lead me to believe that the problem is fairly common around the province. As a result of the debate we're having in the Legislature, perhaps there would be an opportunity for the minister -- perhaps with some of the other ministries -- to go back and explore some ways that could deal with it -- not necessarily by legislation, but by regulation, because it's not a perfect world. But sometimes the frustration that people feel with government is simply focused on these kinds of issues.
To move on, the provincial emergency program as it was enforced prior to this legislation -- and I suppose is still enforced today -- dealt with flood damage. It had some pretty specific regulations that dealt with farm crop damage. I'm wondering if the minister could advise if those regulations would flow through, if you'll pardon the pun, from that legislation to this, or if there would be new regulations around the description of crops.
Hon. C. Gabelmann: I have no expectation that the regulations would change. But I need to say this: there's a full review of all of the regulations attached to the legislation, as is appropriate, and there are discussions with the Ministry of Agriculture with respect to those particular regulations. But in general terms, the principle that has been in place will continue.
J. Weisgerber: With a bit of latitude, then, let me go on record as saying that there are some real deficiencies in the program as it relates to harvested and unharvested crops. There is quite broad coverage for harvested crops, but very little coverage for unharvested crops. For example, farmers may find that a neighbour who harvested a crop that was then damaged is covered; but a fellow who is two weeks, or three days, late picking up his hay bales that are then damaged in the field gets no coverage. Those kinds of things, again, are a source of fairly significant irritation, because while it may be logical according to regulation, for the person who appears injured by the interpretation.... Again, it's an appropriate time to have a look at some of those.
Hon. C. Gabelmann: I agree that it's an appropriate time, and I would welcome commentary from the member if he feels it appropriate to write to me about the changes that he feels could be made in the regulations. I would undertake to have a very careful look at that.
Section 21 as amended approved.
On section 22.
Hon. C. Gabelmann: I move the amendment standing in my name on the order paper.
[SECTION 22, in the proposed subsection (1) by deleting "30" and substituting "60".]
This amendment also accomplishes the change from 30 to 60 days.
[ Page 8980 ]
Amendment approved.
Section 22 as amended approved.
On section 23.
Hon. C. Gabelmann: I move the same amendment standing in my name on the order paper.
[SECTION 23, in the proposed subsection (1) by deleting "30" and substituting "60".]
Amendment approved.
On section 23 as amended.
C. Serwa: A question to the minister. I note that this triumvirate on the appeal board in section 23 are all senior government employees. Would it not be wise perhaps to select an individual from outside government to be one member of the triumvirate? The responsibilities of government would be attended to, but perhaps an opportunity for a different perspective would ensure that there is a perception of fairness. I have some concerns because of a generally developed bias over a period of time, and perhaps because of a protectionist attitude on the part of government. It seems to me that it would be reasonable to have someone who is qualified and who is not part of the government service.
Hon. C. Gabelmann: Let me try this argument on and see if it works: it's always been done this way. That is an argument that I never feel comfortable with, and so I don't use it very often. It is in fact the current process. But the real argument why it has been and why we propose that it continue is that we're talking here about public moneys. In our view, an appeal of this kind to these three ministries will enable a balance of views to prevail in respect of a careful husbanding of public resources and, at the same time, hopefully -- I anticipate, always hopefully -- a fair result. But I didn't spend a lot of time personally on this decision, in terms of sorting through it. It was the way it has been, and it has worked. There haven't been a lot of appeals; there are some. To my knowledge, there has been no real concern expressed about the way the process has worked, and therefore we carried it on.
C. Serwa: I still continue to express concern and reservations, because it is the final or ultimate appeal. The other appeals have been made through the director, and this is the final appeal. There is no other court. Granted, the concerns on the part of the minister and government are quite valid. I have no difficulty with that. I would also like to ensure that fair representation for the injured party and the perception of a fair opportunity are made available in that particular process. The minister indicates that it appears to have been, and very few appeals flow up to this final appeal. But it seems to me that other appeals that go through -- perhaps tax assessment -- utilize private citizens as part of the appeal process.
[8:00]
A. Warnke: The questions that I wanted to put forward were similar to those asked by the member for Okanagan West, except I was going to look at it from a bit of a different angle. I have the same concerns. Is there a possibility of setting up a special committee of the Legislature as that appeal?
Hon. C. Gabelmann: I don't think so. In answer to both lines of questioning, what we are talking about here isn't compensation for a taking, but rather a determination about whether a government offering is appropriate. We are talking about a different kind of issue than we would be if it were an expropriation, where you need to have an independent body making a decision.
As far as having a legislative committee make this kind of decision, I would feel far more comfortable, if it were a technical question.... What is important here is that the rules be constructed and implemented fairly and appropriately. That is what we need to accomplish. This process will enable an individual who feels that they should have gotten $60,000 instead of $50,000 to make a technical argument in favour of the bigger amount. If they can make a good argument, then I would think that this body will be compelled under the rules to apply those rules. That is the way this scheme is designed. It may not be perfect, but given the experience we have had with determinations about pay-outs -- and I have had a lot of experience, because I have had a lot of this in my own constituency -- I think the process works pretty well.
Section 23 as amended approved.
On section 24.
A. Warnke: This section is problematic because it has the potential to dissuade individuals from appealing a decision pertaining to disaster financial assistance. One could ask: if the amount of financial assistance is greater than the initial determination, what is the nature of the amount owing? Or something along that line.
Hon. C. Gabelmann: The experience has been that the debate or the inability to agree is generally about whether the particular area is eligible, rather than about the amount of compensation. What this section really does is ensure that if there is any amount payable, when it may earlier have been determined that there wasn't, it will be paid promptly. It ensures that there is an obligation to respond quickly to the decisions of the appeal board or the director.
Sections 24 to 26 inclusive approved.
On section 27.
A. Warnke: This section increases the fine for refusing to assist from not less than $25 to not more than $100, to a term of imprisonment of not more than one year or a fine of not more than $10,000 or both. This is quite a dramatic increase in terms of the penalty. I'm
[ Page 8981 ]
curious and would appreciate it if the Attorney General could clarify why such harsh penalties are being substituted here.
Hon. C. Gabelmann: First of all, these are maximum amounts and there's always discretion involved there. We're talking about potentially very serious problems, and we're talking about a modernization of a very old act that contains within it some old numbers, given the ravages of inflation.
A. Warnke: The ravages of inflation can take different forms, and perhaps this is a nice reminder of that. I agree with the Attorney General that the actions or inactions of individuals are very serious, especially during an emergency situation. Just another follow-up question. Can the local or provincial authority -- not the police -- press charges for not assisting?
Hon. C. Gabelmann: The normal processes apply. Charges would have to gain the approval of the criminal justice branch of the ministry. Prior to charges being laid, a prosecutor would have to approve them.
Sections 27 to 33 inclusive approved.
Title approved.
Hon. C. Gabelmann: I move the committee rise and report the bill complete with amendments.
Motion approved.
The House resumed; the Speaker in the chair.
Bill 38, Emergency Program Act, reported complete with amendments.
The Speaker: When shall the bill be read a third time?
Hon. C. Gabelmann: With leave of the House now, hon. Speaker.
Leave granted.
Bill 38, Emergency Program Act, read a third time and passed.
Hon. C. Gabelmann: I call second reading of Bill 80.
MISCELLANEOUS STATUTES AMENDMENT ACT (No. 2), 1993
Hon. C. Gabelmann: This bill contains, as I indicated in first reading, a series of amendments to a lot of different statutes. It is the traditional final bill of the session, and I think the tradition has been with miscellaneous statutes that they are better dealt with in committee stage, given that the statute itself has no principle. But I think it is important for me to say to opposition members in particular, but also to all members, that there are a number of sections of this bill which are more than just housekeeping and consequential provisions. They will require more than just a typical committee stage debate and will, of necessity, stray into some discussion of principle. It would be my undertaking to say to the committee that we need to have that fuller, wide-ranging debate during committee stage as we go through the bill seriatim. With that, hoping that the proposal will meet with the agreement of the opposition, I move second reading.
A. Warnke: Normally on bills, I really like to get going on second reading, but this is one of those exceptions, as the Attorney General has pointed out. The bill contains many different provisions. Most of them are consequential provisions, housekeeping and that sort of thing, and as the Attorney General has pointed out, it's really one way to tie up loose ends throughout the session. On this basis, therefore, you cannot really debate a principle of the bill. There is really no overriding principle, but I would point out that what we will be doing as the official opposition is to take a close look at the many different provisions and sections in this bill. Beyond that, it's not necessary to elaborate.
C. Serwa: I would like to confirm that, with the latitude the hon. minister has agreed to in committee stage, we can attend to any short debate on philosophy and principles -- just to have enough latitude rather than dealing section by section. With that clear understanding, that ends my second reading debate.
Hon. C. Gabelmann: I agree with the comments of the members, and give my undertaking, and with that, I again move second reading.
Motion approved.
Bill 80, Miscellaneous Statutes Amendment Act (No. 2), 1993, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.
Hon. M. Sihota: I call committee stage of Bill 67.
RESIDENTIAL TENANCY AMENDMENT ACT, 1993
The House in committee on Bill 67; J. Beattie in the chair.
On section 1.
V. Anderson: I'm just wondering about the reason for repealing the definition of child.
Hon. M. Sihota: We did cover this earlier. It's a technical amendment that was dealt with through the provisions of the Human Rights Act. Section 1 repeals the definition of child, as it places this section in conflict with section 29(2) of the act. The definition says that a child is an individual under 19 years of age. Section
[ Page 8982 ]
29(2) permits the landlord to evict a tenant so that he or she, his or her spouse, child, parent or spouse's parent can occupy the residential premises. The definition of a child dates back to the introduction of the provisions which prevent discrimination against families, and these provisions have since been moved to the Human Rights Act.
[8:15]
Section 1 approved.
On section 2.
W. Hurd: Just a couple of points of clarification on this section. I wonder if the minister could explain the definition of a standard form under section 2, and whether that form is now available, assuming that this legislation becomes law before the end of the session. Are we dealing with a form that is already printed or formulated? Or is this a form that has to be created by regulation?
Hon. M. Sihota: It has to be created by regulation. We have worked with landlords and tenants. We have had a lot of correspondence and wide-ranging consultation over the last 18 months, since I've been a minister, with regard to the standard tenancy form agreement. We have circulated a lot of drafts, and we're quite close to having a final and conclusive agreement that will be made available to landlords and tenants. I wish to thank many of those who have participated in that process -- I could name a whole bunch of them if the hon. member wanted that. But we've had good consultation with regard to developing the agreement.
W. Hurd: Assuming the new forms are not available with the passage of the legislation, would current forms be used? And if they are used, would there be any clash with the new regulations as far as landlords meeting their legal and statutory responsibilities under this new legislation is concerned?
Hon. M. Sihota: Currently multiple forms are available. This would standardize them, and the regulations will be passed so as to give life to the new standard agreement.
V. Anderson: Am I right that once this act is passed and the form is available, or even before it's available, the new form is the requirement? It will mean that the present agreements are outdated and no longer valid. Is there a danger that people can get caught between the old and the new form? That could cause difficulty for either the tenant or landlord unless they sit down and make a new agreement. I'm sure that in the beginning there will be many people who will not be aware -- landlords and tenants -- that the new form exists. If there are difficulties, they're going to get caught with improper regulations without meaning to.
Hon. M. Sihota: All existing agreements will be deemed to have complied with the terms of the standard form, which the hon. member alluded to. If they are in conflict or if the wrong form is used, they will be null and void as to the term.
V. Anderson: Are you saying that they would be still operative for the term of that agreement? Or are you saying that as soon as this form comes out they are then null and void? There could implications for agreements on the new form that neither the landlord nor the tenant might expect to be there.
Hon. M. Sihota: Any term in conflict with the legislation would become null and void. If you have an existing agreement that has a term that is in conflict with the legislation, then it would be void.
L. Hanson: One of the difficulties that happened in the past and, I suspect, the reason this standard form has come forward is that there were a lot of conditions put into lease agreements that were unenforceable. I believe this is why this has come forward. The question I have for the minister is: would the use of an improper form, or the addition of a clause to a lease agreement that was contrary to this act, be an arbitrable issue before the effect of that condition was felt?
Hon. M. Sihota: I don't know if this answers your question, and if it doesn't I'm sure you'll take a second shot here. You can add additional terms to an agreement over and above the standard tenancy agreement. Those are arbitrable as to reasonableness, and the arbitrator will make a determination with regards to that aspect of it.
L. Hanson: If the standard form is used and there is an addendum to that agreement that is not contrary to what is in the act, then it is legal unless it's disputed. If it were disputed, it would be an arbitrable issue in front of one of the boards. Is that arbitrable simply because it's in the agreement form, or is it only as a result of someone trying to enforce that part of the agreement?
It might help the minister understand the question if I started that differently. One concern that I've heard many times is the insecurity of knowing that a clause may not be enforceable but is still in the lease agreement. Even though the fact that it isn't legal is well publicized and documented, the sense of insecurity with it being there bothers the people involved. Can the tenant go to arbitration to have the legality of a clause like that arbitrated before the effect of that clause could be felt?
Hon. M. Sihota: Yes. Let me clarify that. You could go to the arbitrator on your own volition and seek to have that expunged from the agreement.
R. Neufeld: I want to go back to the tenancy agreements that were already in place that will be not be valid anymore. There are probably going to be quite a few people who are not even aware that this is happening unless they rent quite a few places or that happens to be their business. There are probably a bunch of small operators out there renting one home or
[ Page 8983 ]
something. How are we going to get this into place in all those areas so that it makes some sense? If there is a disagreement between a landlord and a tenant a year from now, the ministry is going to say: "Well, we're sorry. The agreement you had was null and void a year ago. If you didn't read the papers or listen to the radio, that's your tough luck." How do we deal with that? How do we let people know? What is the responsibility of the ministry to let people know that this is taking place?
Hon. M. Sihota: Let me just go back to the comments from the member for Okanagan-Vernon. I don't want to mislead him; we had a subsequent discussion after I answered his question. It is possible that in that kind of situation an arbitrator may decide that the clause is not going to be revoked because there's no dispute. I wouldn't want you to think that it will automatically happen. I just wanted to put that on the record.
To answer the questions from the hon. member for Peace River North, we put out a lot of information as a ministry that is widely available through government agent offices and the Ministry of Labour and Consumer Services. In terms of residential tenancy, I think we have the third-busiest program, and one of the most in demand in government. We put a lot of information in pamphlets in different languages that get the information out. Not only will people know that there's a change in law and, hopefully, they will become aware of it through the media, but we take some fairly aggressive steps to make sure that people know. To be honest with you, I find that landlords often find out about these things in newsletters from their own organizations, which are often very effective vehicles to communicate the information.
R. Neufeld: I don't want to belabour this, and I can understand the minister saying that that is the business of people who rent out apartments, homes or duplexes. We could end up catching some retired people who bought a home a number of years ago and are renting it out for extra income. They don't go to the government agent weekly to have a look at the pamphlets or pay a lot of attention to that. I can see the possibility of capturing some of those people in an unfortunate situation. It could be very difficult for either the landlord or the tenant.
Hon. M. Sihota: The agreement in that kind of situation would not be void; just the terms that are in conflict with the legislation. It's not as if they couldn't collect their rent. It's not the agreement that goes if it is deemed to be not in compliance with the standard tenancy agreement; it doesn't mean you don't have an agreement with your tenant.
L. Hanson: I rise because of the addition to the answer the minister gave me. The question of policing comes to mind. What I heard the minister say in the second answer was that if somebody doesn't use the standard form, or doesn't use a form that is in compliance with the standard form, even though -- according to this act -- it will be null and void, there will not be a method for the tenant to have the conditions of the lease clarified through an arbitrator if it comes under question, even though a dispute has not arisen yet.
[8:30]
Hon. M. Sihota: What the hon. member says is true.
L. Hanson: Therefore the requirement to use the standardized form that is going to be developed will only be enforced if there is a dispute resulting from the form that was used.
Hon. M. Sihota: That's right. It does sort of contradict what I said earlier. As I said, there was some confusion on this side in terms of the need for there to be a consequence. As I said earlier, an arbitrator on their own may not do that. You are effectively right in terms of that being the result.
L. Hanson: I'm not sure I even expect an answer on this, but an observation is that it is acknowledged and accepted -- and under the system in place before, it was also acknowledged and recognized -- that if a clause in a lease that was unenforceable came before the arbitration board, it had no effect. The minister is saying that even though we may have a standard agreement in place, even though not everyone may use that standard agreement, and even though clauses in that standard agreement may not be acceptable under this act, the arbitrator will still be obligated to deal with only those.... The agreement would be deemed to be the standard agreement, even though the form that the tenant signed had no relationship to or recognition as the same kind of form. So now the tenant is dealing with a standard lease form, or at least, a lease form that lays out a bunch of conditions such that if a dispute ever came up it would be totally out of the question, based on the dispute. There is a totally new form brought into it, the standard form. I am not trying to confuse the issue, but it has been one of some concern with an awful lot of tenants in the past.
The Chair: Does the minister wish to answer that question?
The member for Vancouver-Langara.
V. Anderson: I am just trying to clarify this. I know a lot of people who have leases just by word of mouth; they don't have any standard form at all. They are in illegal suites or whatever, and they just have a word-of-mouth agreement. Is the minister saying that now everybody automatically has a lease -- whether they write one down or sign one, or whether it is by word of mouth -- and every lease is of a standard form in the basics, whether it is written or signed, as long as people are renting? If so, will the minister be publicizing that standard lease in the newspapers so that the landlords and tenants who haven't even thought about a lease or the form of a lease will have that brought to their attention in a way that it is very
[ Page 8984 ]
difficult to avoid, so they will discover that a whole new process is in place?
Hon. M. Sihota: In the absence of an agreement, they will be deemed to have an agreement that reflects the standard agreement that will be passed in the regulations.
In terms of advising the public, I sort of addressed that issue already with the member for Prince George North, first of all. Secondly, no, we do not intend to advertise or reprint the standard tenancy agreement. It goes on for some pages on paper, so the cost of that is prohibitive. However, we will be doing some public relations work to make sure that people are aware of their rights, obligations and responsibilities in the ways that I already outlined.
Section 2 approved.
On section 3.
W. Hurd: I would just like a brief clarification. The opposition has assumed that substituting "ended" for "terminated" is merely a plain-language amendment. Is that what is intended here, or is there a different interpretation of those two terms under the standard agreement?
Hon. M. Sihota: It is mainly plain language. However, the use of the term "terminated" did have some negative connotations for some new British Columbians, and being sensitive to that, we have brought forward this change.
Section 3 approved.
On section 4.
L. Hanson: Can the minister give us some idea why the date of October 1, 1992, was chosen for retroactivity?
Hon. M. Sihota: It has nothing to do with the anniversary of the election of the government, but I can assure the hon. members that it is a wonderful occasion and it will be repeated many times again in the future. In order for me to answer the question, I must confess I can't talk too much about that wonderful night.
We have received 50 to 75 letters from manufactured-home owners, representing about 18 different parks throughout British Columbia, that have received excessive rent increases. I would describe them as unconscionable, quite frankly, when we see increases as high as 55 percent, with the majority in the 40 to 50 percent range. A lot of these notices were issued at that time, in October 1992. It roughly coincided with the release of the report by the hon. member for Malahat-Juan de Fuca. In anticipation of legislation, people started to increase their rents; hence the retroactive provision.
I want to add, however -- I think it's a salient point -- that the landlords or park owners were very active in their lobby to this government that this retroactive provision come in. It wasn't simply in response to the tenants. We received very vigorous representations from the provincial representatives of the park owners, with regard to the need to have this provision in there.
The Chair: The hon. member for Okanagon-Vernon, whose birthday is today.
L. Hanson: Thank you, hon. Chair. I'm so impressed, I'm going to let section 4 pass -- not really.
On section 4, maybe the minister could give us some indication of what the thinking is behind the deemed submission to an arbitrator covering all of those sections. Isn't there another process -- a mediation process or something else -- that might happen prior to that? Or is it simply for recognizing the mediation process: "If it doesn't work, I agree to submit it to an arbitrator"? Is that the reason for putting that...?
Hon. M. Sihota: This will allow the arbitrator to hear a dispute over the rent increase, in the event that mediation has occurred. If the parties can't agree, then it has to go somewhere, and the deeming provision will give the arbitrator the jurisdiction over the dispute.
V. Anderson: would the minister be kind enough to explain section 4(1)(b)(i)? I've been reading back and forth on that, and I think it would be helpful, because you've got to read back and forth to understand the implications of section 4(1)(b)(i).
Hon. M. Sihota: Sorry about that. There are always benefits to having staff here, but there are occasions when they're both talking to me at the same time and I'm trying to make sense of everything. In any event, we have made sense of it through a mind that has nothing in between the ears sometimes. They end up hearing each other.
If you're renting a home and renting a pad, then the act doesn't apply.
W. Hurd: I have a couple of questions relative to section 4. Concurring with the minister's comments earlier about the number of rent increases that were processed after the report was issued by the hon. member for Malahat-Juan de Fuca, I can certainly attest to that in my own riding. However, I want to ask a question under section 4 -- I'm not sure what section it is -- with respect to the rental of a manufactured-home pad which provides that a dispute over a rent increase must be mediated before it can be arbitrated. Would that also be the case with these rather major increases in rent that occurred in that brief period between October 1992 and now? Would there have to be a mediation process, or would the tenants of manufactured-home parks be able to go directly to arbitration to have them readjudicated?
Hon. M. Sihota: It would go to mediation first, hon. member. That's really in furtherance of our desire to have the parties resolve these issues on their own. I appreciate that in the kind of situation you refer to, that might be a very quick process with very little result.
[ Page 8985 ]
Nonetheless, we are trying to make a statement in legislation encouraging landlords and tenants of manufactured-home parks to work out their differences. Both landlords and tenants who made representation to us were vigorous in making that point.
R. Neufeld: I was interested in the minister's words, going back to October 1, 1992. I don't agree with excessive rate increases or pad rentals, but I remember having to write the Minister of Health about excessive rate increases by the present government -- and you're part of it -- in care homes, where you increased the rates by 40 percent to 50 percent for the rental portion. And you call this unconscionable, excessive and ridiculous? I can go to people in my constituency who have tried to subdivide off a piece of land and have had their fee increases go up by 400 percent. Or we can go to ambulance fees, which have increased by 20 percent, 30 percent or 40 percent. I just wonder if the minister feels....
The Chair: The hon. minister on a point of order.
Hon. M. Sihota: Hon. Chair, I have no difficulty in debating the budget or any other fee increase in Health or any other area of government activity, when it's appropriate. At this point we are dealing with a section under this legislation, and I would suggest to you, hon. Chair, that the point that the hon. member is making is out of order, although I can appreciate his desire to take advantage of a political opportunity.
[8:45]
R. Neufeld: It's interesting; obviously I struck a little bit of a nerve. If you don't like fee increases of 30 percent or 40 percent or 50 percent, then why do you take part in it -- if it's unconscionable, ridiculous and excessive? I'm talking specifically to the minister about health care and what happens in care homes. That was specifically about a 42 percent increase to senior citizens for the rental portion only. Your government gave those people 30 days from the day the letter was written to comply. Does the minister feel that is not excessive or unconscionable? How does the minister feel about representing his government when he talks about retroactivity in this legislation?
The Chair: Hon. member, we are dealing with section 4 of Bill 67. Health directions are not really a part of this specific act, so I would ask members to keep their questions specific to this legislation.
L. Fox: I'll deal specifically with the rental portion. I ask the minister whether or not this retroactivity or these controls will apply to tenants who are renting in government-owned senior citizen care facilities. Will this section apply to those tenants?
Hon. M. Sihota: I have had occasion in this House to observe the hon. member in debate, and I know him to be a wise gentleman. He possesses great intellect, and I'm sure that intellect will quickly tell him that this section applies only to manufactured homes. He knows that. If he wants to have a political debate with me at any time, anywhere, I'd be happy to rough him up, but not during the course of this debate.
V. Anderson: Section 13(1.4) says: "A landlord or tenant may not apply for arbitration of a dispute under subsection (1)(b) until the dispute has been mediated under Part 4.1." I've been trying to follow where the connections between (1)(b) and 4.1 are and what they refer to.
Hon. M. Sihota: It refers to the rent increase and the mediation aspect -- i.e., you must go through mediation first with regard to a rent increase before you go to arbitration.
Section 4 approved.
On section 5.
R. Chisholm: I'm just asking why the change from "lease" to "tenancy" is necessary.
Hon. M. Sihota: It's a plain-language change, hon. member; it cleans up the act.
Section 5 approved.
On section 6.
Hon. M. Sihota: I move the amendment standing in my name on the order paper with regard to section 6.
[SECTION 6, in the proposed section 16 (4) by adding "plus interest" after "security deposit".]
Amendment approved.
Hon. M. Sihota: I move the other amendment to section 6 standing in my name on the order paper.
[SECTION 6,
(a) in the proposed subsection (6) by adding ", without notice to the landlord," after "registrar", and
(b) in the proposed subsection (8) by deleting "may order" and substituting "may, without hearing the landlord, order".]
On the amendment.
L. Hanson: I'd like to have a bit of an explanation from the minister as to the need for that amendment. I'm not aware of its purpose, and I guess I should have looked at the order paper -- it's done properly and everything. Was there a suggestion that the landlord should have been notified? It adds "without notice to the landlord." I guess what the minister is saying is that if the landlord fails to comply with subsection (2) and does not apply for an order under subsection (4), the tenant may apply to the registrar for an order without notice to the landlord.
[ Page 8986 ]
Hon. M. Sihota: Yes, that's right. The purpose here is to clarify that the order can be done without notice to the landlord. In other words, when the 15 days are up, if the landlord has not complied, then it just allows for that process to occur in an expedited way. So it just clarifies that there's no notice requirement there.
Amendment approved.
On section 6 as amended.
L. Hanson: Subsection (2) says: "The landlord shall return the security deposit and interest to the tenant on or before the 15th day after the end of the tenancy agreement, except for an amount that (a) the tenant agrees in writing to allow the landlord to keep as payment for unpaid rent or damages, or (b) an arbitrator has ordered the tenant to pay to the landlord." In other words, any charges or reductions from that security deposit must happen only as a result of an arbitrator's order. There can be no deductions other than by an arbitrator's order. Is that correct?
Hon. M. Sihota: Yes.
L. Hanson: Well, then, it would seem to me that the landlord would have to pay a fee to the arbitrator to make that application. If the security deposit is in fact short of the amount needed to put the facility back into the condition that was accepted, the landlord would be now out another $35 before that could happen. The quid pro quo of that is that if the landlord fails to return a deposit, the tenant can apply to the arbitrator to have the security deposit back, plus the fee that the landlord paid. It seems like there might be two kinds of standards involved. Does the minister not acknowledge that?
[M. Lord in the chair.]
Hon. M. Sihota: It's not automatic, of course. The arbitrator can decide who will pay the fee.
L. Hanson: It doesn't say anywhere whether the landlord can then apply with proper documentation for the forfeiture of the whole security deposit, plus the cost of the registration and so on, as a judgment against the tenant. Even though there isn't money on deposit to pay the whole amount, there is still an order that it should be paid by the tenant if that's found to be reasonable.
Hon. M. Sihota: The arbitrator could rule that the tenant must pay the $35 application fee, assuming that the landlord has made a case to say that there was damage occurring. I think that's what you meant at the end by reasonableness. But yes, that could occur.
L. Hanson: The arbitrator's decision, I gather from that, is not restricted to the amount of the security deposit. It could include the cost of the fee for the application, and it could have extra damages over and above that, which the arbitrator could rule on as being owed by the tenant. The collection of that amount, over and above the security deposit, might then be subject to whatever court remedies may be available, but not through the residential tenancy branch.
Hon. M. Sihota: That's true.
L. Hanson: I'm getting a lot of agreements, but I'm not sure they are the agreement that I'm looking for.
We are dealing with the whole of the section. I notice on page 5 of Bill 67, in section 16(10), that it says: "A landlord shall not apply for the order referred to in subsection (4) after the 15th day following the end of the tenancy agreement." I suspect that's there because there have been instances where landlords, through nothing but refusing to give the money back, have frustrated the tenant, and the time limits that were in place before -- 30 days -- have not necessarily been.... I don't have too much trouble with that.
What I do have a lot of trouble with is that if, after the end of the tenancy agreement, the landlord is unable to locate the tenant, any money owing to the tenant under this section is deemed to be held in trust by the landlord for the tenant for two years following the end of the tenancy agreement. There is a need and a reasonable requirement to deal with these sorts of security deposits in an expedient manner, but that responsibility should be on both sides of the agreement, not just one. The landlord is expected to hold that money in trust for two years, while being expected to make an application within that 15-day period. I can see where there should be some extended time for the tenant to apply for that money, but two years seems to me to be an unreasonable time to require the landlord to hold it. I will admit that subsection (13) shows that if it isn't claimed within that two-year period, it is forfeited to the landlord. But that seems like an unfair time lapse -- 15 days for the landlord, then two years for the tenant.
Hon. M. Sihota: You may want to take that up with your friend Jim Nielsen, and maybe Rafe. Maybe Rafe was around then, too, but I think it was Jim Nielsen who introduced that provision in 1984, and we've just simply kept it in legislation. It's a provision we just carried forward. The section has been restructured to let it flow better in terms of its reading, but that's really where its origins were. That provision was brought in during 1984; I believe it was Jim Nielsen at the time.
L. Hanson: Despite what the minister may assume, I haven't always agreed with what's happened with past governments. I have to admit that I also had an opportunity to change that, because I had a responsibility for this act at one time. But the question is now that the minister has brought forward these changes to the act, and that seems to be something that is unfair. The minister makes the comparison that he just brought it forward because it was in an act that was introduced by a government of my political beliefs some time ago. He felt that it was necessary to change the 30 days for the landlord to return the deposit, which
[ Page 8987 ]
was part of that government's legislation. He chose to change that to 15 days, but now he says that I should be happy with the other one because it was in place from a past government of my political beliefs. I don't agree with that. I believe there is a need for fairness. I believe there is a need for protection to the tenants, and I believe there is a reasonable need to protect the landlord also. I think that leaving the two years is unfair in light of changing the 30 days to 15 days.
[9:00]
Hon. M. Sihota: I have to admit that you don't make a bad argument. For a moment there I thought that since you and I had both missed the opportunity, it might be a good opportunity right now to deal with the issue. I will talk to some of the groups involved. On the face of it, I agree with you. The two-year period does seem to be rather long. I will talk to some of the groups involved just to make sure that we haven't missed something here. I agree, and I will try to find a way -- maybe through miscellaneous statute or whatever -- to change it. I think, for many of the same reasons it got past you when you were in the portfolio, it got past me. I will be happy to take a look at that.
V. Anderson: I thank the minister for that promised change, because I agree with it whole-heartedly. With respect to the interest mentioned in subsection (1), how is the interest rate set on the security deposit?
Hon. M. Sihota: It is set under the regulations under this act.
A. Warnke: A few calls were received by my colleague the member for Surrey-White Rock and myself, hence we would like a clarification. There seems to be an understanding that if the damage deposit is to be given back.... There's a concern among landlords that they must hire legal counsel. There have been some concerns along that line, and I'm wondering if the minister could clarify that.
Hon. M. Sihota: Believe you me, this legislation isn't a make-work project for lawyers, although some would prefer that it be. The situation hasn't changed. Landlords have to make application, and generally they are very familiar and comfortable with the system. It is a very relaxed system. I don't know if the hon. member has taken part with constituents on it, but it's very relaxed and certainly not an experience like going to court. I don't think you really need legal representation.
A. Warnke: I wasn't thinking that anyone was creating a make-work project for lawyers. I just wanted to know if the status quo had been substantially altered, and this seemed to be the concern that was expressed to us.
Section 6 as amended approved.
On section 7.
Hon. M. Sihota: I would like to move the amendment to section 7 standing in my name on the order paper.
[SECTION 7, by deleting "(2) to (4)," and substituting "(2), (3),".]
Amendment approved.
Section 7 as amended approved.
Sections 8 to 10 inclusive approved.
On section 11.
Hon. M. Sihota: I wish to move the amendment standing in my name on the order paper.
[SECTION 11, by deleting section 11 and substituting the following:
11. Section 29 is amended
(a) in subsection (4) by striking out "the landlord may give a notice of termination to the tenant under subsection (6)." and substituting "and the landlord has obtained whatever permits and approvals are required by law to demolish, convert or renovate the residential premises, the landlord may give a notice of the end of the tenancy agreement to the tenant, with the applicable notice period under subsection (6), (6.1) or (7).",
(b) by repealing subsection (6.1) and substituting the following:
(6.1) Where a landlord in good faith intends to demolish residential premises and the municipality within which the premises are located has, by bylaw, established a notice period of at least 2 and not more than 6 months, this period shall, notwithstanding subsection (6), be the minimum notice period for the purposes of the notice.,
(c) by repealing subsections (6.2) and (6.4), and
(d) in subsection (7) by striking out "subsection (6)" and substituting "subsections (6) and (6.1)" and by striking out "6 months." and substituting "12 months.".]
Amendment approved.
On section 11 as amended.
A. Cowie: Perhaps we could have a little explanation from the minister. I take it that this is due to the so-called Kerrisdale situation in Vancouver where they brought in a permit which, I understand, now works very well. You have to have a permit, and then six months is required before the tenant has to move out. If they do that, there is no moving cost to the landlord. Could we have some clarification on that?
Hon. M. Sihota: That is what this section does. I know this was a significant issue some time ago, and I know many members have lobbied on this issue. In fact, the hon. member himself may have lobbied on the issue, although it arose before he was elected. It is a provision that clarifies that a tenant's moving expenses must be
[ Page 8988 ]
paid by the landlord in all cases of demolition or change of use of residence.
A. Cowie: I just wanted to comment that I think this regulation will work very well. The Kerrisdale situation actually happened about five or six years ago, and continues to be used as an example during elections. In fact, there has really been very little problem in this area in the last three years.
Section 11 as amended approved.
On section 12.
Hon. M. Sihota: It's with great pleasure that I move the amendment standing in my name on the order paper which deletes section 12 and substitutes clarity in wording with regard to that section.
[SECTION 12, by deleting section 12 and substituting the following:
12. Section 30(2.1) is repealed and the following substituted:
(2.1) If a landlord gives notice for a reason specified in section 29(4) with a notice period specified in section 29(6) or (6.1), the landlord shall pay to the tenant the greater of
(a) the tenant's actual and reasonable moving expenses to the new accommodation up to a maximum equal to one month's rent, or
(b) where proceedings are brought under subsection (1), the amount ordered by the court.]
Amendment approved.
Section 12 as amended approved.
Sections 13 to 15 inclusive approved.
On section 16.
L. Hanson: Under section 16, section 39.1 reads: "(1) The registrar may establish rules of procedure for the conduct of arbitrations under this Act. (2) The registrar or a person authorized by the registrar may publish decisions of arbitrators or otherwise make them available to the public and to arbitrators". I'm not sure if this is where the minister would like to deal with this. The arbitration process that we have in place now is a pretty simple process. There is little or no recognition of precedents and so on. In combination with two or three other sections of the act, this section would lead you to believe that we are going to legalize a pretty simple arbitration process by the use of precedent. Can the minister comment on that?
Hon. M. Sihota: No, that's not the intention, and even I would regret it if that occurred. We're not going to do that. To give the hon. member some comfort, let's not forget that we are not amending section 42 of the current legislation where it says that in a matter before him or her an arbitrator shall make a "decision on the merits of the matter and is not bound by legal precedent." So the purpose here is to make sure people know what the decisions have been and have a better idea in terms of standardizing the process. But I want to put it on the record very clearly that I'm not interested in getting into the business of legal precedents. I think the hon. member should take comfort in the fact that the legislation which makes that implicit is still law.
L. Hanson: It says that the registrar may publish decisions of arbitrators or otherwise make them available to the public and to arbitrators. Mr. Minister, it seems to me that those kinds of decisions should be less permissive and more requiring, particularly in the case of being made available to the public and to the arbitrators. I'm not so concerned with the "may publish" part. But as I read "may make them available to the public and to arbitrators," it seems to me that those kinds of decisions should be available to the public and to arbitrators. This seems to be a discretionary decision on the part of the director or on the part of the registrar as to whether he or she would make them public.
Hon. M. Sihota: There are some 16,000 decisions, and quite frankly, to make it a mandatory provision -- putting in the word "shall" -- would have some fiscal implications in terms of the ministry. I'm sure the hon. member would not want to increase my budget in that regard. As you are undoubtedly aware, there is always a balancing of competing interests in these kinds of matters; hence it's being a permissive provision.
L. Hanson: I can appreciate that. Recognizing the fiscal restraints on this minister, I can understand his concern. But it seems to me -- and this is my concern -- that if the public or an arbitrator requested a copy of a decision, he or she should be guaranteed to get that. The way this reads, it says "may." But he may not, too. That's the point I'm trying to make. I'm not suggesting you spend a bunch of money publicizing every decision.
Hon. M. Sihota: I agree. If someone requests a decision, we'll make it available. We simply don't want to have to publish every one of them. But if someone requests a decision, we'll make it available.
V. Anderson: The question may not fit here, but I'm not sure where to ask it. There are new rules of procedure for arbitration. Does that imply that there will also be new rules of procedure for mediation? Mediation per se is mentioned, but there's no case here where it really talks about it or what the process of mediation is -- prior to arbitration.
Hon. M. Sihota: That is dealt with in a later section. Remember, a mediator needs more flexibility and can't be tied down to some rigidity in terms of rules, because of the nature of the process of mediation.
Section 16 approved.
[ Page 8989 ]
On section 17.
V. Anderson: Perhaps the minister could tell us the nature of the qualification for arbitrators or mediators, how the arbitrators and mediators are appointed and how one accesses them.
[9:15]
Hon. M. Sihota: Actually, I think we dealt with this issue in estimates. The staff within the ministry look for people who have arbitration and mediation skills; they try to seek out those individuals. They have discussions with them, and they advertise in legal publications, and so on, to attract people. My experience has been that the staff brings forward a series of names after they've had those discussions. The system seems to work well on that basis, and I don't think there's any great need to change it.
Section 17 approved.
On section 18.
L. Hanson: This is another of those sections that the minister gave us his assurance earlier was not trying to legalize the process. But my concern is with the result of this phrase: "...may conduct the hearing in the manner he or she considers necessary, subject to rules of procedure, if any, established by the registrar under section 39.1...." The registrar has the right to establish the rules of procedure, yet it isn't subject to the scrutiny of the ministry. Despite his assurance that this will not become more legalized and eventually require lawyers and all of the rest of the procedure in a court case or something similar to a court case, it seems to me that this leaves it open to that sort of abuse.
Hon. M. Sihota: We're certainly not interested in making it complex or legalistic; we're simply interested in providing some structure to the meetings and in laying out at the beginning that it is appropriate for the parties to introduce themselves and maybe say a little about their case, and to let them know what the procedure will be as we go in. Sometimes when you go into these kinds of hearings, people are very anxious to get at one another. Just to lay out some ground rules is often very useful. That's really all we're trying to do. Again, I don't want to have the kind of presence one has in a courtroom. I don't think anybody is interested in that, and no one wants to bring about that kind of feeling or complexity. But this is just to let parties know how the matter will be handled, that they will have their opportunity to state their case in the fullest and that it might be best to hear from one party first and then the other. That kind of approach is consistent with what we've done in the past.
Sections 18 and 19 approved.
On section 20.
V. Anderson: Could the minister say what 44.1 is, which is being repealed?
Hon. M. Sihota: Section 44.1 permitted the registrar to order third-party tenants to pay their rent to the registrar if the landlord had failed to comply with an order of an arbitrator to pay an amount to the tenant. This proved to be a hollow order. The problem was that if third-party tenants refused to pay their rent to the registrar, there was no way the registrar could enforce the order.
V. Anderson: I wonder, because people have asked about it, might "third party" in this case apply to social services ministries that are providing rent?
Hon. M. Sihota: No, it would be the tenants.
Section 20 approved.
On section 21, section 45.1.
L. Hanson: I just have one quick question. Is it understood that none of these individuals who sit on the arbitration review panel would be sitting arbitrators?
Hon. M. Sihota: Yes.
Section 21, section 45.1 approved.
On section 21, section 45.2.
L. Hanson: Section 45.2 says that you have to apply for leave to have the decision of an arbitrator reviewed, and I guess that the chair is the individual who would hear that review. What criteria would the minister give as direction to the review panel to allow a review of an arbitrator's decision?
Hon. M. Sihota: They would have to meet the grounds enumerated in section 45.5.
L. Hanson: So we will get to that.
Hon. M. Sihota: We will get to that in a minute.
Section 21, section 45.2 approved.
On section 21, section 45.3.
L. Hanson: To make a request with respect to a decision or an order of an arbitrator relating to section 36, it must be within two days; section 35, five days; and any other section, 15 days. Why the different time limits?
Hon. M. Sihota: Some matters are more urgent than others. Matters of possession and termination, for example, require dispatch. So two days is for disputes involving early termination under section 28 or orders of possession under section 36, and five days is for dispute of notice of termination under section 35.
L. Hanson: I understood that in an earlier section -- and the minister may remember, his staff probably
[ Page 8990 ]
will remember -- an arbitration decision could be applied for without notice to the other party.
Hon. M. Sihota: It only dealt with a security deposit being returned after 15 days.
Section 21, section 45.3 approved.
On section 21, section 45.4.
L. Hanson: The minister said that under this section the panel would listen to the reasons: "(2) On an application for leave for a review hearing, the review panel member shall grant leave if satisfied that the application discloses reasons that, if uncontradicted, satisfy the requirements under section 45.5...." Are those new reasons that didn't come out at the arbitrator's hearing? Is it a requirement for new evidence? Or is it simply a review of the decision made as a result of the evidence presented at the original arbitration hearing?
Hon. M. Sihota: Perhaps we should deal with that in section 45.5. It would include new evidence, but it's enumerated in section 45.5.
Section 21, section 45.4 approved.
On section 21, section 45.5.
L. Hanson: The review panel has to be satisfied that a party "...(ii) has new and relevant evidence which was not available at the time of the original hearing, or (iii) was not given an adequate opportunity to be heard at the original hearing," or that "(b) the arbitrator who held the original hearing (i) was biased or appeared to be biased...." Those are the reasons a review could happen. I guess it does answer my question, in the sense that it would allow a review to happen simply based on the opinion that the arbitrator was biased. I can't argue with that, hon. minister.
Section 21, sections 45.5 and 45.6 approved.
On section 22, section 45.70.
A. Cowie: I have a question on 45.71. If the landlord doesn't agree to have a tenants' committee, what can the tenants do to ensure that they can get a committee?
Hon. M. Sihota: The landlord must be a party to the committee. If the landlord doesn't agree and is not on board at that level, then it just kicks up to the next level, to the provincial committee. If the landlord is unwilling to participate, then the opportunities at that local level are exhausted, and one just moves up to the next level -- which, of course, the landlord must submit to.
Section 22, section 45.70 approved.
On section 22, section 45.71.
L. Hanson: I thought the last question was on 45.71, but in any case....
An Hon. Member: It was.
L. Hanson: It was, yes.
The minister suggested that if the park owner wouldn't agree to the formation of this committee, there were remedies later on. When rules are made under this section they are the rules in effect in the park, and any other rules are ineffective. The question that comes to mind is: what rules would this park committee enforce? If they were dealing with a landlord who was totally uncooperative, would they go ahead and make their rules anyway, and then ask for arbitration to enforce the rules?
[9:30]
Hon. M. Sihota: Normally the landlord has a direct interest in establishing rules. You have all sorts of park rules, such as where people can park and whether lawns must be kept trimmed -- the usual. I think all of us in this House have had experience in looking through some of those rules; at times they are remarkably onerous. If a landlord refuses to go by them, the provincial agency, which appears later in the legislation, has the ability to develop standard rules.
L. Hanson: The minister just gave us a good description of a lot of the difficulties that do happen in these parks. I suspect -- and I think the minister would admit -- that upon the formation of a park committee, the park owner may have some concern. In the past, park owners may have been used to establishing their own rules and regulations. Now they are going to have a committee, and the committee is going to establish them. The owner may or may not think that is a good system.
Interjection.
L. Hanson: I'm not suggesting the owner is right or wrong. I'm simply saying -- and I think the minister would recognize -- that there may be a little friction created as a result of this. When that friction starts to happen, what will the resolution be? What process will be in place? Does the park committee apply to the arbitrator for a decision about what the rules should be?
Hon. M. Sihota: It would go the provincial committee -- if I can put it that way -- which is the next level up, to resolve those disputes. It's going to take a minute to answer the question. What we're trying to do is encourage a meaningful dialogue between landlords and tenants in manufactured-home parks. In most cases, I think both parties agree there is a mutual interest in doing that. Since we introduced the report from the member for Malahat-Juan de Fuca, we haven't received any concern that I'm aware of from the manufactured-home parks with regard to this provision. It's consistent with the attitude that was displayed in getting us to this legislation.
[ Page 8991 ]
I'm aware of a landlord, who will go nameless, in my own constituency who will never cooperate with tenants and will have some difficulty in accepting this legislation. This encourages a behavioural change. It's a welcome modification of behaviour, where someone unilaterally imposes owner's rules that really are beyond being reasonable. If they can't work it out, they can be kicked upstairs to be dealt with. I've dealt with cases where people have insisted that the only person who can be the real estate agent for the sale of a manufactured home is the park owner, who happens to be a real estate agent. You get those kinds of rules, and people aren't going to vary from that position. There should be some scope for someone independent to deal with the issue.
L. Hanson: I respect that. I suspect that the minister knows and would agree that where this system will work well and quickly on a cooperative basis, there wasn't really a problem to start with. Where it won't work, and where there is a problem, as you suggest, is where the resolution is going to have to go to the Manufactured Home Park Dispute Resolution Committee. We are coming to that in section 45.72. I have to suggest to the minister -- and I hope that he is aware of this -- that when people who own an enterprise feel they have the right to dictate what happens within that enterprise, putting in a community group to help make the rules and so on is probably going to cause a fair amount of friction in some parks. I hope that the minister and his staff will be well aware of that, because in many cases this will not be a smooth transition to a new process.
V. Anderson: If I understand rightly, under section 45.71(2), there are prescribed regulations as to how a park committee is to be formed, and under section 45.71(7), there are prescribed rules for that committee to follow. If I am right in those two undertakings, the question is: can the park committee form itself differently than the prescribed rules if they choose to do so, and can they undertake rules for the park that are different or contradictory to the park rules under section 45.71(7)?
Hon. M. Sihota: Within your own park establishment you have total flexibility over rules you want through the local committee, so you are not in any way limited by the subsequent provisions.
Section 22, section 45.71 approved.
On section 22, section 45.72.
L. Hanson: This is the appointment of the dispute resolution committee that the minister referred to earlier as having responsibility for resolving those disputes that are going to happen as a result of the local park committee. They will be appointed for a term of three years, none of whom shall be a tenant or an owner of a manufactured-home park. Then it goes on to say that the minister "may appoint members of the dispute resolution committees other than the chair and vice chairs for terms not exceeding three years, provided that 1/2 of them are owners of and 1/2 are tenants of manufactured home parks." How large does the minister expect to make this? Will there be dispute resolution committees for each individual park, each area or one for all of British Columbia?
Hon. M. Sihota: We're looking at one chair and two vice-chairs to deal with the issues. Obviously, it really depends on the volume of work we get; hopefully, it won't be significant. That's where we're going to start, and we'll see what the additional requirements are. The legislation just gives us the flexibility to make those additions.
L. Hanson: I would imagine that the minister anticipates with subsection (c) that the chair and vice-chair would sit in charge of panels with other people, half of whom are owners and half tenants of manufactured-home parks. In other words, you would see a vice-chair sitting on a panel with a mobile-home park owner on one wing and a tenant on another wing. Would that be the composition of the panel, or would the panel initially be the chair and the vice-chairs sitting on wings resolving the disputes, until the volume required the appointment of other members?
Hon. M. Sihota: No, the idea is that at the beginning, there would be a chair, a homeowner and a park owner.
L. Hanson: So we could reasonably assume that a panel would consist of a chair or vice-chair and two wing members representing the interests of the two different parties, and the minister would empanel them on the basis of need in the province?
Hon. M. Sihota: Yes.
H. De Jong: If a mobile-home park has been established -- as quite often these parks are, at least in the lower mainland -- on less than supportive soil, and the park is filled with fill to bring it up to standard, and if as a result of the combined weight of the fill, mobile homes and whatever else goes on those places, continual sagging of the land takes place and services break down, then the park owner has a justifiable claim to increase the rents each year to cover the cost of the maintenance of such a park. If such a situation happened, would it go to that committee? Could they make a reasonable judgment on it and compare it to maintenance costs of other parks?
Hon. M. Sihota: Yes. There are situations where someone is going to have to increase the rent because of unforeseen circumstances. Sometimes those circumstances are a consequence of a previous owner not adequately attending to a place, or whatever. But yes, you would be able to make those kinds of cases. If others have lower costs but different circumstances, that may justify a higher rent increase. If others have similar circumstances, then I'm sure an arbitrator
[ Page 8992 ]
would take a look at that. But we're not trying to deny any flexibility in the system, hon. member.
V. Anderson: In this mediation process, are we working on a consensus model? Or, if we have three members on the committee, are we working on a majority model? Just how does that decision come down?
Hon. M. Sihota: We are trying to get consensus through mediation.
Section 22, sections 45.72 and 45.73 approved.
On section 22, section 45.74.
L. Hanson: Section 45.74(1) refers to mediation. Who are the mediators? I know that it later refers to the dispute resolution committee appointing a dispute resolution subcommittee, but who would be the mediator in the case of approval of an application for mediation?
Hon. M. Sihota: The committee itself or the chair.
L. Hanson: Then it says: "The chair of the dispute resolution committee shall appoint a dispute resolution subcommittee to mediate a dispute between a tenant...and the landlord if the subject matter...could be referred to an arbitrator under section 13(1)." Would there be individual subcommittees within each mobile-home park, or are they provincial subcommittees?
[9:45]
Hon. M. Sihota: Provincial.
L. Hanson: Okay.
The chair of the dispute resolution committee would not get involved in the dispute if he or she were satisfied that the local park committee was serving that purpose. Could the local park committee then act as a mediator, even though the chairman of the local park committee may be the individual who has the dispute with the landlord?
Hon. M. Sihota: One would not expect an individual to mediate their own dispute. It couldn't happen in those cases.
V. Anderson: I am just clarifying the difference between mediation and arbitration. In earlier parts of the bill we had mediation and arbitration. Mediation and no arbitration is listed in this area. Does that mean there is no arbitration, that mediation serves the purpose?
Hon. M. Sihota: If mediation fails to achieve a consensus, then you go to arbitration.
V. Anderson: If we are going to arbitration, where does that come in? Is that later on?
Hon. M. Sihota: I appreciate that question. The way the legislation is laid out is somewhat confusing. We have already dealt with that issue in the rent review arbitration process that we passed earlier. It's local park committee, mediation, then arbitration -- that's the route. Don't worry about where they are placed in the legislation; just remember that that's the process.
V. Anderson: Just for clarification, are you saying that arbitration under rent review in the first part also applies to the homeowners in this section?
Hon. M. Sihota: With regard to rent review, yes.
C. Serwa: In section 45.74, I note that in the case.... For example, let's take a rent increase. First of all, the owner has to go to the local park committee. It's very difficult for me to understand why you would have to go to that committee first and not go to the dispute resolution committee. It seems very hard to be successful in going to the local park committee, where they all have a vested interest in not wanting that rent increase. It's hard to see how you could get a meeting of the minds with that first step.
Hon. M. Sihota: It is and it isn't. At first blush, you would think it is. I've done a lot of these, funnily enough, because I've got so many in my constituency since it was redistributed that we're used to it now -- Actually, I think my colleague for Malahat-Juan de Fuca ended up inheriting most of them. It is amazing, you know, if you can get the parties to meet, how expeditiously they can resolve these issues. As your colleague for Okanagan-Vernon said a while ago, most people are accommodating and will be able to work very effectively within the context of this legislation.
Sometimes it takes the intervention of a third party, like an MLA or somebody else, just to get the parties together. We really want to encourage the parties to work out their differences at the local level, and we're going to try to make provision for that to happen. It's been known to happen with perhaps more regularity than most of us would think would be the case. Obviously if you get people to work on rules and that kind of stuff at the local level, there's a better understanding and a psychology, which, hopefully, will carry you into the more delicate issue of rent review. So we're going to encourage it. Of course, you're right, it may not work. If it doesn't work, we've got the safeguard of the approach.... But I have to say that just from my own experience on these kinds of matters, it's surprising how well it works.
L. Hanson: To sum all this up so I have a fairly good understanding of it, the dispute resolution committee would act as a mediation committee if they so desired, or they could appoint a park owner and a tenant who would sit under one of the chairs of the dispute resolution committee mediating the dispute. Failing all of that, they would then turn their hats around and become the arbitration committee and make a decision that would be binding on the two parties.
[ Page 8993 ]
Hon. M. Sihota: You get nine out of ten. You had it all the way until the end there. No, they would not turn around and put on a different hat. That would go to the arbitrator within the ministry that does rent review, to the arbitrators that we have. There are actually three different bodies. We are not doing med-arb -- if I can use a labour relations term -- at the provincial committee level.
L. Hanson: All right. Nine out of ten is not bad. Then the arbitrator, under the Residential Tenancy Act -- actually the same group of people who would be dealing with security deposits and so on -- would rule on the issue as an arbitrator. An appeal to that would go to the arbitration appeal board, if I understand it -- I am not sure.
Section 22, sections 45.74 to 45.76 inclusive approved.
On section 22, section 45.77.
A. Warnke: I have a quick question. If a party may have to apply to a court for an order requiring another party to comply with the agreement, it would seem that the authority of the dispute resolution committee is rather limited. In some instances where moneys are owed, would it not be simpler to take the whole process to small claims court?
Hon. M. Sihota: It really wouldn't be a court; it would be the arbitrator, because the arbitrator is the court of competent jurisdiction. It is just the way it is framed here in terms of the wording.
Section 22, section 45.77 approved.
On section 22, section 45.78.
A. Warnke: With regard to rent increases, I wonder if the minister could indicate how the date of October 1, 1992, was chosen. And given that increases on October 1 became effective May 1, if there is a dispute over an increase presently being paid, can that be taken to mediation?
Hon. M. Sihota: Yes, it can be taken to mediation. I did answer about the date, October 1, 1992. It coincides roughly with the report that we received from the member for Malahat-Juan de Fuca. The fact was that we had received about 18 rent increases, averaging somewhere between 40 percent and 50 percent. In anticipation of legislation, people raised rents, so we wanted to be able to deal with that. As I said earlier, both landlords and tenants asked the government to put in that retroactive provision to send a signal that we expected a certain kind of behaviour as a consequence of this legislation.
A. Warnke: As a follow-up question, can a number of people as a group from one park take the one landlord to mediation, or must they be individual hearings?
Hon. M. Sihota: They can do similar disputes and be heard at one time by the arbitrator. There is a provision in this legislation for that.
R. Neufeld: In 45.78(2), it implies that the guidelines for rent increases, if any, have been published by the minister under section 45.73. We went by 45.73, the guidelines for increases in rent. Could the minister explain that for me a bit, please? Is the minister coming forward with regulations as to what the rent increases will be, on a broad brush across the province? What does that specifically mean?
Hon. M. Sihota: I'm not doing that myself, as the minister. I will be asking the provincial committee to give advice or direction to the minister, and we can make some information available as a consequence under this section.
R. Neufeld: So the published rent increases by the minister are not specifically from him; they will be recommendations from the provincial council. Is that correct? Yes. Okay.
Section 22, sections 45.78 to 45.82 inclusive approved.
Section 23 approved.
On section 24.
V. Anderson: Can the minister explain where an action against the landlord for personal property is taken? Mediation? Arbitration? Court? Section 48.2 says a tenant may commence an action against the landlord. To whom is that action taken?
Hon. M. Sihota: To the arbitrator, hon. member.
Section 24 approved.
On section 25.
A. Warnke: I have a very quick comment. This section adds how to serve documents in an arbitration of a monetary claim. I would like to very briefly explore the process a tenant must go through in order to serve the documents. Particularly with the number of numbered companies, a tenant may not be able to secure the information required. This may act as a deterrent to a tenant seeking recourse. I'm wondering if the minister could briefly respond to that.
Hon. M. Sihota: Actually, I had this kind of situation in a case where we worked for some tenants. They would tell us a numbered company and try to avoid it. I believe that was some time ago, under the 1984 legislation. Through a search at the registrar of companies, you can get the information, either in terms of the landlord's address or that of their agent, who is usually a solicitor. There is some time involved, but the expense really isn't great. I haven't checked to see what
[ Page 8994 ]
the fees are or whether they have been increased, but they are relatively nominal, and it can be done.
[10:00]
Section 25 approved.
On section 26.
L. Hanson: I don't have a copy of section 53 in front of me. I imagine it refers to the Lieutenant-Governor-in-Council's ability to make regulations. Subsection (n) states: "...setting out what matters may be, or may not be, the subject of rules that govern the operation of a manufactured home park...." By that I would assume that this joint committee that is going to consist of tenants and the landlord to set up the rules of the park may have some restrictions on what rules it can set up. Hopefully, there would be some discretion left to the owner as to what he can still do with the park, because without some restriction on that, the rules could be so all-encompassing that the owner is owner in name only.
Hon. M. Sihota: Under a previous section we passed, the provincewide standard rules are established not by the minister but by the provincial committee. The committee would make some recommendations in terms of a standard rule format, then the cabinet could implement them. But it would come from that committee; it would not come from the government. Under section 45.73 the committee could recommend standard manufactured-home park rules. So if they do make that recommendation, this gives us ability to breathe life into them through regulation; otherwise they couldn't do that which we said they could do.
A. Warnke: I just have a very quick question. How soon does the minister expect the regulations to be in place?
Hon. M. Sihota: It's hard to say. One could proceed with some fairly soon, but others will certainly take a while. It depends on what they're intended to cover. Also, quite frankly, it depends on the resources of the ministry.
Sections 26 and 27 approved.
Title approved.
Hon. M. Sihota: Hon. Chair, I move the committee rise and report the bill complete with amendments.
Motion approved.
The House resumed; the Speaker in the chair.
Bill 67, Residential Tenancy Amendment Act, 1993, reported complete with amendments to be considered at the next sitting of the House after today.
Hon. M. Sihota: I wish to thank all members for their assistance and participation in the debate today. We obviously made considerable progress, and I appreciate it very much. Accordingly, I will take this opportunity to advise all hon. members that the House will sit tomorrow at 2 o'clock. I wish them well for the balance of the evening.
Hon. M. Sihota moved adjournment of the House.
Motion approved.
The House adjourned at 10:06 p.m.
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